Sunday, 13 Oct, 2024
By: Yash Gupte
Sudhanshu Pandey, Secretary, Department of Food & Public Distribution (DFPD), Ministry of Consumer Affairs and Food & Public Distribution, stated on 8th September 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;
India banned the export of broken rice with immediate effect from 9th September 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 8th September 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% 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.
In a notification released by the Directorate General of Foreign Trade (DGFT), it said that the broken rice has been transferred from ‘free’ category to the ‘prohibited’ category. It also said that consignments will be approved for export during this period if loading of broken rice on ships began prior to the notification. Apart from this, a 20% export duty on non-basmati rice was imposed by the government taking into consideration the fall in area under the paddy crop in the current Kharif season. The area under paddy cultivation this Kharif season is 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% 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 is to meet the targets of ethanol blending program. Sugar-based feed stocks alone cannot meet the 1100 crore litres of ethanol required for 20% ethanol blending by 2025. Distilleries have supplied only roughly 16.36 crore litres (until 21.08.2022) of the stipulated quantity of 36 crore litres in 2021-22 due to a lack of broken rice for ethanol production as high quantity of broken was exported to different countries. The chart below shows the export of broken rice from India during the last five years.
*Export of broken rice from April-July 2022
Source: Ministry of Commerce and Industry
The export of broken rice has been rising continuously over the years. In the FY 2017-18, 1200.355 tonnes 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 tonnes of broken rice was exported in the FY 2019-20. The exports in the FY 2020-21 registered a growth of 663.7% as 2064.562 tonnes 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 tonnes of broken rice was exported. According to the government reports and the opinion of the field experts, the high export of broken rice and irregular rainfall this year has caused the shortage of the commodity and increase in its price. Therefore, the government has decided to ban the export of broken rice and make it available for domestic consumption. Experts argue that this is tend to cause a shortage of broken rice worldwide and the importing countries will be forced to explore new export partners like Thailand and Vietnam. The export od broken rice in the current FY till July stands at 1799.525 tonnes.
