Friday, 17 May, 2024
By: Yash Gupte
India had banned the export of broken rice with immediate effect from September 9, 2022 as measure to increase the domestic availability of the commodity. Image Source: IANS
"The export policy of broken rice is prohibited, however, export will be allowed on the basis of permission granted by the Government of India to other countries to meet their food security needs and based on the request of their government,” the Directorate General of Foreign Trade (DGFT) said in a notification.
Despite the export restriction on broken rice being in effect, the government late on Wednesday allowed exports of broken rice based on permission granted by the government for shipments to other nations in order to meet their demands for food security. Even if certain countries may ask India for supply of broken rice on a case-by-case basis, New Delhi does not have any plans to ease the export restriction on the grain, a government source said. “The export policy of broken rice is prohibited, however, export will be allowed on the basis of permission granted by the Government of India to other countries to meet their food security needs and based on the request of their government,” the Directorate General of Foreign Trade (DGFT) said in a notification.
India had banned the export of broken rice with immediate effect from September 9, 2022 as measure to increase the domestic availability of the commodity. Sudhanshu Pandey, Secretary, Department of Food & Public Distribution (DFPD), Ministry of Consumer Affairs and Food & Public Distribution, stated on September 8, 2022 that the government has amended the broken rice export policy in order to ensure adequate availability of broken rice for consumption by domestic poultry industry and other animal feedstock; and to produce ethanol for successful implementation of EBP (Ethanol Blending Programme) programme.
Due to higher international prices, the domestic price of broken rice which was Rs. 16/kg has gone up to Rs. 22/kg. The poultry industry and animal husbandry producers were the hardest hit by the price increase of feed ingredients, as broken rice accounts for 60-65 percent of the cost of chicken feed, and any increase in pricing will result into increase in the prices of poultry products such as milk, eggs, and meat. Also, a 20 percent export duty on non-basmati rice was imposed by the government taking into consideration the fall in area under the paddy crop in the Kharif season. The area under paddy cultivation in Kharif season 2022 was lower as compared to the previous year as 403.58 lakh hectares area was under paddy cultivation in 2021 as compared to 325.39 lakh hectares of area under cultivation in 2022. India exports rice to over 150 nations and the recent ban on broken rice and imposition of 20 percent export duty on non-basmati rice tend to increase the food prices, which are already rising due to drought, heat waves, and Russia's invasion of Ukraine. According to experts, the primary reason behind the prohibition on the export of broken rice was to meet the targets of ethanol blending program.
Later on November 29, 2022 the central government lifted the ban on the export of organic non-basmati rice and broken rice. According to the commerce ministry, rice worth $5.5 billion was exported during April-September in the fiscal year 2022-23. There was a year-on-year drop in the export of the commodity as rice worth $9.7 billion was exported during the same period in 2021-22.
Source: Ministry of Commerce and Industry
According to a Wednesday report from Mint, as part of its economic diplomacy during the first half of the current fiscal year, India will send over 1.05 million tonnes (MT) of food grains to Nepal, Indonesia, Senegal, and the Gambia. The department of food and public distribution granted permission for the shipment of 500,000 tonnes of broken rice to Senegal, 200,000 tonnes of broken rice to Indonesia, 50,000 tonnes of broken rice to the Gambia, and 300,000 tonnes of wheat to Nepal.
The export of broken rice has been rising continuously over the years. In the FY 2017-18, 1200.355 tons of broken rice was exported from India. The FY 2019-20 witnessed a massive decline in the exports of broken rice due to the outbreak of the covid-19 pandemic which forced the government to impose nationwide lockdowns and which ultimately disrupted the global supply chains. Only 270.338 tons of broken rice was exported in the FY 2019-20. The exports in the FY 2020-21 registered a growth of 663.7 percent as 2064.562 tons of the essential commodity was exported to different countries. The FY 2021-22 witnessed the highest exports of broken rice till date as 3890.866 tons of broken rice was exported. They FY2022-23 witnessed a slight drop in export of broken rice as the government had imposed a ban on the export of commodity in September 2022.
Farmers are expected to benefit from the central government’s decision of lifting the ban on export of broken rice. Many rice mill associations had requested the government to lift the ban which was imposed in September 2022. One of them was the South India Rice Millers Association (SIRMA). It had demanded to lift the ban and abolish the 20 percent export duty. SIRMA’s president T Devender Reddy had earlier said that the export ban would result in farmers suffering a loss of about Rs 600 per quintal.
Source: Ministry of Commerce and Industry
Broken rice is often used in the manufacture of feed for very young animals and pets. It is also utilised for all varieties of livestock, and its high caloric value and low fibre content make it especially ideal. Additionally, it is utilised in the brewing business to make arak, an aniseed-based alcoholic beverage that is distilled and colourless. It serves as a raw material for making rice flour, which is then utilised to make rice wine, rice liqueur, sake, and packed and tinned goods. China was the top buyer (15.85 LMT) of Indian broken rice in 2021-22, followed by Senegal (9.22 LMT) and Vietnam (3.44 LMT).
Farmers are expected to benefit due to the government’s decision of lifting the ban on the export of broken rice. The export of the commodity from India will also ensure a sufficient stock of rice in countries which import rice from India. India accounted for 41 percent of the total rice exports in the world in 2021 larger than the next four exporters (Thailand, Vietnam, Pakistan and United States) combined. China, Senegal, Vietnam, Djibouti and Indonesia are the biggest importers of India’s broken rice. Therefore, if the ban would have been continued for a longer period of time, major rice exporting nations like Thailand, Vietnam and Pakistan would have benefited and captured the market, resulting in a loss for India.
