India allows non-basmati white rice exports to boost global supplies

The Indian government on September 28 gave the green light to resume exports of non-basmati white rice as inventories in the world's largest exporter of the grain surged and farmers prepared to harvest the new crop in the coming weeks.

Larger rice shipments from India will boost overall global supplies and depress international prices by forcing other major rice exporters such as Pakistan, Thailand and Vietnam to cut their prices. New Delhi has set a floor price for non-basmati white rice exports at $490 a tonne.

India allows exports of non-basmati white rice to boost global supplies. Illustrative photo

The decision comes a day after the government cut export duty on white rice to zero. New Delhi's decision to allow traders to sell non-basmati white rice in the global market follows a series of moves to ease export restrictions on aromatic, premium basmati and parboiled rice varieties.

Earlier, on September 27, India also reduced the export tax on parboiled rice to 10% from 20%. Earlier this month, the government removed the floor price for basmati rice exports to help thousands of farmers who have complained about being unable to access lucrative overseas markets such as Europe, the Middle East and the United States. With the El Nino weather pattern raising the specter of poor monsoon rains, India imposed several restrictions on rice exports last year and extended them until 2024 to control domestic prices ahead of national elections in April-June.

Since the 2023 export ban, domestic supplies have increased, increasing inventories in government warehouses. Rice stocks at the state-run Food Corporation of India stood at 32.3 million tonnes as of Sept. 1, 38.6% higher than last year, giving the government enough room to ease the export curbs.

Boosted by abundant monsoon rains, farmers have planted rice on 41.35 million hectares (102.18 million acres), up from 40.45 million hectares (99.95 million acres) last year and an average of 40.1 million hectares (99.09 million acres) over the past five years. The decision to allow exports of non-basmati rice will boost rural farm incomes and help India regain its footing in global markets. Despite a 10 percent export tax on parboiled rice and a floor price of $490 a tonne, Indian white rice will be competitive in international markets.

On September 28, India lifted a blanket ban on overseas shipments of non-basmati white rice and imposed a minimum export price (MEP) of $490 per tonne. Exports of non-basmati white rice have been banned since July 20, 2023 to boost domestic supply. The policy for exports of non-basmati white rice (fully or partially milled rice, whether polished or unpolished)... has been revised from banned to liberal, subject to an MEP of $490 per tonne with immediate effect and until further orders.

With this, India has eased restrictions on some rice exports, which could depress global rice prices and signal a shift in domestic agricultural policies following recent national elections. The MEP has lifted a ban on exports of non-basmati white rice. India and Pakistan are the only countries that grow premium basmati rice, and India’s restrictions have helped Pakistan gain market share in some varieties. India’s basmati rice exports in April-July, the first four months of the fiscal year, rose 20% year-on-year to 1.9 million tonnes despite the MEP.

The country exported a record 5.2 million tonnes of rice last fiscal year as Canada, Iraq, Oman, Saudi Arabia and the UK increased purchases, offsetting the impact of lower purchases from Iran. Unlike regular rice, basmati rice is not widely consumed in India and, unlike regular rice, the government does not buy it to build state reserves.

Source: https://congthuong.vn/an-do-cho-phep-xuat-khau-gao-trang-non-basmati-de-thuc-day-nguon-cung-toan-cau-349222.html