Here's why govt bans exports of non-basmati white rice

The government on Thursday banned exports of non-basmati white rice to boost domestic supply and keep retail prices under check during the upcoming festive season.

There would be no change in export policy of par-boiled non-basmati rice and basmati rice, which forms the bulk of exports, the food ministry said in a statement.

Non-basmati white rice constitutes about 25 per cent of total rice exported from the country.

"Export policy of non-basmati white rice (semi-milled or wholly milled rice, whether or not polished or glazed)...is amended from free to prohibited," the directorate general of foreign trade (DGFT) said in a notification.

"Export policy of Non Basmati White Rice amended to ensure adequate domestic availability at reasonable prices," the ministry said, adding, the move is aimed to ensure lower prices and adequate availability in the upcoming festival season.

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In order to ensure adequate availability of non-basmati white rice in the domestic market and to allay the rise in local prices, the government has amended the export policy from 'Free with export duty of 20%' to 'Prohibited' with immediate effect.

"The domestic prices of rice are on an increasing trend. The retail prices have increased by 11.5 per cent over a year and 3 per cent over the past month," the statement said.

Export duty of 20 per cent on non-basmati white rice was imposed on September 8, 2022 to lower the price as well as ensure availability in the domestic market.

However, the export of this variety increased to 42.12 lakh tonnes in September-March period of the 2022-23 from 33.66 lakh tonnes during September-March period of the previous fiscal.

In the first quarter of the current fiscal, about 15.54 lakh tonnes of white rice was exported against only 11.55 lakh tonnes in the year-ago period, which means an increase by 35 per cent.

"This sharp increase in exports can be ascribed to high international prices due to geopolitical scenario, El Nino sentiments and extreme climatic conditions in other rice producing countries, etc.," the statement said.

The prohibition on export of non-basmati white rice will lead to lowering of prices for the consumers in the country.

However, there is no change in export policy of non-basmati rice (par boiled rice) and basmati rice, which forms the bulk of rice exports.

"This will ensure that the farmers continue to get the benefit of remunerative prices in the international market," it added.

As per the commerce ministry data, India's total exports of basmati rice stood at USD 4.8 billion in 2022-23, while in volume terms it was at 45.6 lakh tonnes.

Similarly, exports of non-basmati stood at USD 6.36 billion in the last fiscal. In volume terms it was 177.9 lakh tonnes.

Major destinations of India's non-basmati white rice exports include Thailand, Italy, Spain, Sri Lanka and the USA.

As per the DGFT notification, the consignments of this variety of rice will be allowed to be exported under certain conditions such as where loading of rice on the ship has commenced before this notification.

Export will also be 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 governments, it added.

The DGFT also said that exports are permitted for those consignments where the shipping bill is filed and vessels have already berthed or arrived and anchored in Indian ports and their rotation number has been allocated before this notification.

"The approval of loading in such vessels will be issued only after confirmation by the concerned port authorities regarding anchoring/berthing of the ship for loading of non-basmati rice prior to the notification," it said.

The exports are also allowed where the consignment has been handed over to the customs before this notification and is registered in their system.

Separately, the directorate said that it has extended the last date for submission of application for obtaining licence for export of broken rice to Senegal, Gambia and Indonesia till July 27 this year.