Ban On Rice Exports

What Exactly are White Raw Rice, Parboiled and Broken Rice?

• White raw rice: Rice is derived from milling of paddy grain produced by farmers. What remains after removal of the husk and bran is the white raw rice that constitutes 68-69% of paddy.
• Broken rice: It is fragments of rice grains, broken in the field, during drying, during transport, or during milling.
  • This inferior grain mainly used for animal feed and as ethanol feedstock.
• Parboiled rice: Parboiling is a process where the paddy is soaked in water, steamed and dried while retaining its outer husk. It results in the rice becoming harder with less breakage on milling.

Ban of Rice Exports

• The restrictions/ban on Rice Exports were based on two notifications.
  • Export duty: In September 2022, the Department of Revenue in the Ministry of Finance notified 20% duty on exports of rice other than parboiled and basmati rice.
  • Blanket ban: Later, the Directorate General of Foreign Trade in the Ministry of Commerce and Industry imposed a blanket ban on broken Rice Exports.
• There are four categories of Rice Exports. Out of these, exports in the case of two – basmati rice and parboiled non-basmati rice –are still freely allowed. The curbs are only for the other two: raw (white) and broken non-basmati rice.

Reasons for the Restrictions on Rice Exports

• Lower crop yields: There is possibility of decline in India’s rice production because of deficient monsoon rainfall in Uttar Pradesh, Bihar, Jharkhand, and Gangetic West Bengal.
• During the current kharif season, farmers have planted less area under rice compared to the same period last year.
• Also, yields in Punjab and Haryana got effected due to a new virus that has caused “dwarfing” of paddy plants in many fields.
• Depleting public rice stock: Given the political pressure to continue the free-foodgrains scheme (Pradhan Mantri Garib Kalyan Anna Yojana) beyond September 2022, it is rice that is sustaining the public distribution system (PDS), as the public wheat stock has been at record low this year.

Impact of these Restrictions on the Country’s Overall Rice Exports

• India, in 2021-22 (April-March), exported a record 21.21 million tonnes (mt) of rice. That included
  • Basmati Rice Exports(3.95 mt)
  • Parboiled Rice Exports (7.43 mt)
  • Broken Rice Exports(3.89 mt).
  • Non-Parboiled Non-Basmati Rice Exports (5.94 mt)(whose shipments attract 20% duty).
• Simply put, the curbs announced will affect just under half of India’s Rice Exports in terms of quantity and over a third by value.

Stats on India’s Rice Exports

• India is the world’s largest rice exporter, accounting for 40 per cent of the global rice trade.
• According to the data from 2021-22:
  • More than 75% of basmati Rice Exports went to Iran and the Arabian Peninsula countries; the US, UK, Canada and Australia added up to another 10%.
  • In non-basmati Rice Exports, almost 55% went to African countries.
  • Much of Rice Exports to Africa and Bangladesh consist of parboiled non-basmati rice.
  • The largest importer of broken Rice Exports from India is China, followed by Senegal, Vietnam, and Djibouti.

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