Understanding curbs on Rice Exports

What’s in Today’s Article?

• Why in News?
• Rice Production in the Current Season
• India’s Rice Exports
• What can Indian Farmers/Consumers Expect?
• Steps Taken by the Union Government
• What are Rice Exporters Saying?

Why in News?

• In a move to check domestic rice prices and ensure domestic food security, the Union government has imposed certain restrictions on rice exports.

Rice Production in the Current Season:

• According to the Department of Agriculture and Farmers Welfare, during the Rabi season 2022-2023, rice production was 13.8% less, at 158.95 lakh tonnes against 184.71 lakh tonnes during Rabi 2021-2022.
• Kharif sowing data show that rice is sown on 384.05 lakh hectares this year as on August 25 compared with 367.83 lakh hectares during the same period last year.
• Trade and rice millers say that new season crop arrivals will start after the first week of September and that El Nino effects are likely to impact arrivals to some extent.
• Paddy prices that were ₹27 a kg last year this month are at ₹33 a kg now.

India’s Rice Exports:

• India is the largest rice exporter globally with a 45% share in the world rice market.
• Overall rice exports in April-May of 2023 were 21.1% higher compared with the same period last financial year.
• In May alone, export of Basmati rice was 10.86% higher than its exports in May 2022.
• The shipment of non-Basmati rice has been on the rise for the last three years and the export of Basmati rice in 2022-2023 was higher than the previous year.
• The data shared by the government says that till August 17 this year, total rice exports (except broken rice) were 15% more at 7.3 million tonnes as against the 6.3 million tonnes during the corresponding period last year.
• Thailand expects nearly 25% lower production in 2023-2024; Myanmar has stopped raw rice exports; and it is said to be low in Iraq and Iran as well.

What can Indian Farmers/Consumers Expect?

• The government has increased the Minimum Support Price (MSP) for rice, and the paddy procured now by rice millers are at a price higher than the MSP.
  • Hence, the prices will not decline for farmers.
• The restrictions on exports will ensure that there is no steep climb in rice prices in the market.
• For domestic consumers, though there is a slight increase in rice prices at present, in the long run, availability is secured and prices are not expected to spiral.

Steps Taken by the Union Government:

• To check domestic rice prices and ensure domestic food security, the Union government has prohibited the export of white (non-basmati) rice, levied a 20% export duty on par-boiled rice till October 15.
• The government has also permitted the export of Basmati rice for contracts with value of $1,200 a tonne or above.
• The export of broken rice has been prohibited since last September.
• However, it is allowed on the basis of permission granted by the government to other countries to meet their food security needs and based on the request of their government.

What are Rice Exporters Saying?

• Prices of Indian par-boiled rice in the international market is competitive even with the levy of a 20% duty.
• When the global rice market is bullish, it will absorb volume in high prices too. Overall, the international demand is very high.
• Also, countries such as Indonesia, which are rice exporters, are looking at imports (raw rice) now.
• As per the rice exporters, the government should look at classifying rice as common rice and speciality rice for export policy decisions rather than classifying as Basmati and non-Basmati.
• As many as 12 varieties of rice have Geographical Indication (GI) recognition and these should be insulated from general market interventions.
• In the case of Basmati rice, the government should have permitted exports to continue or fixed the minimum value for exports at $900 a tonne.
  • Basmati is a speciality rice and new crop arrivals will start soon and there is no need for restrictions.
• Since Indian rice quality and the consistency in supply is good, export demand is only going to increase further.

Q1) What is Rice Fortification?

Fortification of rice makes it more nutritious by adding vitamins and minerals, many of which are lost during the milling and polishing process. Rice can be fortified using dusting, coating or extrusion technology.

Q2) Which is the biggest rice producing state in India?

With 14.37% of India’s total rice output, West Bengal is the biggest rice producing state in the country.

Source: Explained | Understanding curbs on rice exports | ToI