- India has banned exports of broken rice and imposed 20% duty on exports of non-Basmati rice except for parboiled rice, to boost domestic supplies amid a fall in area under the paddy crop in the current Kharif season.
- Some exports will, though, be allowed till September 15, including for where loading of broken rice on the ship has commenced before this ban order, where the shipping bill is filed and vessels have already arrived and anchored in Indian ports and their rotation number has been allocated, and where broken rice consignment has been handed over to the customs and is registered in their system.
Why is India so crucial –
- India’s rice exports touched a record 21.5 million tonnes in 2021. More than the combined shipments of the world’s best four biggest exporters of the grain : Thailand, Vietnam Pakistan and the United States.
- India, the world’s biggest rice consumer after China, has a market share of more than 40% of the global rice trade.
- High domestic stocks and low local prices allowed India to offer rice at deep discounts over the past two years, helping poorer nations, many in Asia and Africa, grapple with soaring wheat prices.
- India exports rice to more than 150 countries and any reduction in its shipments would fuel food inflation. The grain is a staple for more than 3 billion people, and when India banned exports in 2007, global prices shot to new peaks.
But why ban now?
- The ban on exports assumes significance as it appears that the overall down area under paddy this Kharif season could be lower than that of last year. The area under the paddy crop has been down by 5.62% at 383.99 lakh hectares in the ongoing Kharif season so far due to poor rains in some states, as per the latest data released by the agriculture ministry.
- India, the world’s second largest rice producer after China. This can have an impact on both crop prospects as well as prices going forward.
- The country exported 21.2 million tonnes of rice in 2021-22 fiscal year, of which 3.94 million tonnes were Basmati rice. It exported non-Basmati rice worth USD 6.11 billion in the same period, as per official data.
Impact of the Ban on other countries –
- The new duty is likely to discourage buyers from making purchased from India and prompt them to shift towards rivals Thailand and Vietnam, which have been struggling to increase shipments and raise prices
- The duty will affect white and brown rice , which account for more than 60© of India’s exports, said B.V. Krishna Rao, president of the All India Rice Exporters Association.
- India has been cheapest supplier of rice by huge margin and that shielded African countries such as Nigeria, Benin and Cameroon, to an extent from a rally in wheat and corn prices. China was the biggest buyer of broken rice, with purchases of 1.1 million tonnes in 2021. You can visit to know about Aksai Chin issue.
- prices in India too are buoyant and are currently trading above the minimum support price. So we can’t say ” India bans export of rice ” as invalid.
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