Non-basmati rice: 20% export duty

The move comes at a time when 5.6 per cent lesser area has been reported under rice crop in the ongoing kharif season. As per the Agriculture Ministry, as on September 2, about 383.99 lakh hectare (ha) area was reported under rice, i.e. 5.6 per cent, or 22.90 lakh ha, less than the corresponding period of last year (406.89 lakh ha). The lesser area coverage under rice is reported from several states including Jharkhand, Madhya Pradesh, West Bengal, Chhattisgarh, Uttar Pradesh, Bihar, Odisha, Andhra Pradesh, Assam, Meghalaya, Punjab, Jammu & Kashmir, Mizoram, Sikkim and Tripura.

While the area under rice has been reported lower in several states amid uneven monsoon in those states, the Centre has set the kharif rice procurement target at 518 lakh metric tonnes (LMT) during the upcoming kharif marketing season (KMS) 2022-23 — marginally higher than the actual procurement of 509.82 LMT during the last KMS 2021-22 (Kharif crop). This is significant in view of lower wheat output and procurement during the rabi season 2022.

India implements one of the biggest food security programmes for which it requires a large quantity of foodgrains.

During the first four months (April-July) of the current financial year, India’s rice exports stood at $3.652 billion, with Iran, China, Saudi Arabia, United Arab Emirates and Benin being its top destinations. In all, India has exported rice to over 100 countries in the current fiscal.

The move to impose export duty on rice may cool down domestic prices. As per data available with the Consumer Affairs Ministry, average all-India retail price of rice was reported at Rs 37.58 per kg on September 8, which is 5.71 per cent higher than a year ago (Rs 35.55 per kg). The average wholesale price of rice has recorded an even higher increase (7.52 per cent over the rice price a year ago).

The export duty on various grades of rice comes at a time when China has emerged as the top buyer of Indian rice during the pandemic. An analysis of trade data showed that the neighbouring country imported 16.34 LMT, or 7.7 per cent of India’s total rice export of 212.10 LMT, during 2021-22.

It also points out that of China’s total rice import from India last fiscal, 97 per cent — or 15.76 LMT — was broken rice, which has seen a spike in demand from the neighbour. In fact, China is now the top buyer of Indian broken rice, which has been exported earlier mostly to African countries.

During 2021-22, India’s total rice exports (both basmati and non-basmati) stood at 212.10 LMT, i.e. 19.30 per cent higher than 177.79 LMT during 2020-21. However, in the same period, rice exports to China jumped by 392.20 per cent — from 3.31 LMT to 16.34 LMT.

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Of India’s total rice exports of 212.10 LMT during FY22, basmati rice accounted for 39.48 LMT, which was 14.73 per cent lower than 46.30 LMT during 2020-21. Iran (9.98 LMT), Saudi Arabia (6.74 LMT) and Iraq (4.86 LMT) were the top three buyers of Indian basmati rice in the last financial year, while China (1,076 metric tonnes) stood at 66th place in the list of over 150 countries.

Non-basmati rice accounts for the lion’s share in the basket of Indian rice exports. During 2021-22, export of rice (other than basmati) stood at 172.62 LMT, which was 31.27 per cent higher than 131.49 LMT in FY21. This non-basmati rice category comprised 6 sub-categories — rice in husk of seed quality; other rice in husk; husked (brown) rice; rice parboiled; rice excptg parboiled (excl basmati Rice); and broken rice. Of these six categories, the maximum export of rice was recorded in the rice parboiled category (74.52 LMT). followed by rice excptg parboiled (excl basmati Rice) category (52.48 LMT) and broken rice (38.64 LMT).

While Bangladesh, Benin, Cote d’Ivoire, Togo, Guinea, Somalia, Liberia, Sri Lanka, Djibouti and South Africa were top-10 buyers of Indian parboiled rice during 2021-22, China emerged the top buyer of broken rice.