Ban on non-basmati white rice hits 20% of India's rice exports

India has banned the export of non-basmati white rice – a variety that constitutes about 25% of the country’s rice exports – with immediate effect on July 20. The prohibition on export will lead to a fall in prices for consumers in the domestic market, the food ministry says.

According to the central government, the ban has come after the export of this particular variety of rice increased even after imposing a 20% export duty on it in September 2022. “The export of this variety increased from 33.66 lakh metric tonnes (LMT) in Sept-March 2021-22 to 42.12 LMT in Sept-March 2022-23 even after the imposition of 20% export duty. In the current FY 2023-24 (April-June), about 15.54 LMT of this variety of rice was exported against only 11.55 LMT during FY 2022-23 (April-June), i.e. an increase by 35%”, the food ministry states.

The commerce ministry data indicates the export of the specific variety of rice (H S Code 10063090) was 63.99 LMT (worth $ 2.2 billion) during 2022-23, a 22.59 % increase in volumes over 52.19 LMT (worth $ 2 billion) in 2021-22. India exported 42.34 LMT of non-basmati white rice in 2020-21.

“Despite two curtailing moves last fiscal -- the ban on broken rice exports, and 20% duty on non-basmati exports ­­– India’s overall rice exports rose 5-6% even as overall production fell. To boot, as of July 1, 2023, rice stock with the Food Corporation of India is down a fifth on-year. The consequent tight supplies meant domestic prices rose 14-15% last fiscal,” says Pushan Sharma, director-research, CRISIL Market Intelligence and Analytics.

Sharma says the government has seen this development as red lines from domestic food security and inflation point of view. “We expect Thursday’s blanket ban to reduce India’s rice exports to more than a fifth of what was exported last fiscal. That should improve domestic supplies and have a moderating effect on retail prices,” he adds.

India has been the biggest exporter of rice in the past couple of years, accounting for a third of global exports. However, there is no change in the export policy of non-basmati rice (par boiled rice) and basmati rice, which forms the bulk of India’s rice exports. The government says it will ensure the farmers continue to get the benefit of remunerative prices in the international market.