INDIA- The Indian government has imposed a 20% duty on exports of parboiled rice , a move that could further reduce shipments from the world’s largest exporter and lift global rice prices, which are already trading near their highest levels in 12 years.
This comes after India introduced a ban on exports of non-basmati white rice last month.
The recent ban prompted some buyers to increase purchases of parboiled rice and lifted its prices to record highs, according to a Mumbai-based dealer with a global trade house.
Additionally, the government is expected to notify a minimum export price (MEP) for basmati rice, pegged at US$1,200 (Rs 99,000) a tonne.
All these moves are meant to slow down shipments and allay any fear of short supply in the domestic market, although there has been only a marginal increase in retail prices of rice in the past year.
Earlier, the government had banned the export of broken rice non-basmati rice, and wheat as well.
The latest move comes amid fears of a reduction in domestic production due to the monsoon trend and risk of El Nino despite the paddy acreage going up this year.
Floods in parts of Punjab and Haryana, delayed sowing in eastern states and less rain in Karnataka may impact the summer crop.
As per the notification issued by the finance ministry, the export duty on parboiled rice will be in force till October 15. Sources said the mid-October deadline has been kept considering that the government will have a fair idea about expected rice production by that time.
The steps with regard to rice were announced weeks after PM Narendra Modi, during his Independence Day address, spoke about the government taking more measures “to minimize the burden of price rise” on people.
While the finance ministry notification says the fresh export duty on parboiled rice comes into force with immediate effect, exporters who have contracted before the notification was issued are allowed to export their consignments at zero duty until October 15.
In addition, sources said the MEP on basmati rice would also be reviewed in the first week of October.
India has been the world’s largest rice exporter since 2012 and it exports food items to more than 100 countries including Nepal, Bangladesh, Indonesia, Malaysia, the UAE, and the African countries of Madagascar, Benin, and Kenya.
Meanwhile, farm industry data shows that Indian farmers have planted 38.4 million hectares (94.8 million acres) with rice, up 4.3% on the same period last year, as a revival in July monsoon rains and higher prices encouraged growers to boost acreage, which could alleviate supply concerns globally.