CNA – India’s rice farmers and exporters are feeling the crunch of a ban on broken rice exports and duty hikes on several varieties of the grain.
The restrictions were introduced by the India government on September 8 to cool rising prices and maintain sufficient supplies for the local population.
While the curbs bring some relief to consumers, it is bad news for business in a country that is the world’s largest exporter of rice.
For rice exporter Al-Gyas Exports, the government’s move to slap a ban on broken rice exports – which make up 10 per cent of its shipments – came as a shock. The company ships some 300,000 tonnes of rice a year, largely to countries in the Middle East and across Africa.
“It will affect 10 per cent of the sales, and we are looking to compensate for that with other products,” said Al-Gyas Exports’ director Naeem Ilyas Motorwal.
“In general, I think it was a positive move by the government (to put) some restrictions, because they cannot allow a lot of rice to go when we also have a lot of consumption for the same product in India as well.”
Rice is a staple that households across India widely depend on, not just for food but also for animal feed.
However, with uneven rains during this year’s monsoon season, there are expectations of a decline in production.
Meanwhile, food inflation has been soaring, with grain prices up more than nine per cent in August on the year, according to official data.
This has prompted the government to intervene to control the price of rice locally.
“If we see India’s context, in the entire global scenario, our share and exports have been rising,” said director at analytics firm Crisil Pushan Sharma.
“Over the last few years, we used to account for about 24 per cent of global exports from 2018 to 2019. That has risen to 40 per cent.”
Pushan added: “So the fear is that, given the decline in domestic production, global production, and India’s rising share in exports, the prices locally could start escalating, which is why the ban has been put in place to protect the domestic needs.”
Basmati and par-boiled rice are not affected by the measures aimed at curbing overseas shipments.
