Has India’s restrictions fueled the prices of rice across the globe?

  • Soon after India banned the export of non-basmati white rice on July 20, there was a sharp jump in the price of rice across markets. In the following months, prices have come down, but are still higher than the pre-ban period.

Is there any impact on the domestic prices of rice?

  • There has been no respite from the increase in the prices of rice despite the export ban. As per the data available on the Agriculture Ministry’s UPAg portal, the daily average wholesale price of rice was recorded at Rs 5,800 per quintal on October 24, 2023, which was 27.43 per cent higher than a month ago (Rs 4,208.57 per quintal)
  • The retail prices are also higher than last year. For instance, the daily average retail price of rice was recorded at Rs 42.80 per kg on October 24, which is 12.59 per cent higher than a year ago, and 11.72 per cent higher compared with the day the government put in place the export regulations.
  • On July 20, the day India banned the export of non-basmati white rice, the all-India daily average retail price of rice was recorded at Rs 40.89 per kg, which was 11.42 per cent higher than a year ago.
  • The all-India average daily wholesale price of rice was recorded at Rs 3,587.34 per quintal on July 20, 11.95 per cent higher than a year ago.

How does India export rice? What is banned and what is not?

  • India is the biggest exporter of rice in the world. As per the United States Department of Agriculture (USDA), India accounted for about 40 per cent of the total rice exports (56 million tonnes) in the world during calendar year 2022.
  • India’s rice exports are broadly categorised into basmati and non-basmati rice. The non-basmati rice category includes 6 sub-categories— rice in husk of seed quality; other rice in husk; husked (brown) rice; rice parboiled; non-basmati white rice; and broken rice. While the government has banned export of two sub-categories of broken rice and non-basmati white rice, there is no ban on the remaining four sub-categories.
Basmati Rice
  • In the financial year 2022-23, India’s basmati export stood at 45.61 lakh metric tonnes. Iran, Saudi Arabia, Iraq, UAE, and Yemen were the top 5 destinations of Indian basmati during 2022-23. In all, India exported basmati to 149 countries during the last financial year.
Non-Basmati Rice
  • The non-basmati rice includes varieties like Sona Masuri and Jeera rice. In financial year 2022-23 (April-March), India exported 177.91 lakh metric tonnes of non-basmati rice, of which a maximum 78.48 lakh metric tonnes was parboiled rice, and it was followed by non-basmati white rice (64.01 lakh metric tonnes), and broken rice (30.49 lakh metric tonnes).
Non-basmati White Rice
  • Out of the 64.01 lakh metric tonnes of non-basmati white rice India exported during the last financial year, a maximum of 5.82 lakh metric tonnes was exported to Benin, followed by Madagascar (5.55 LMT), and Kenya (5.46 LMT). Cote D’ Ivoire, Mozambique, Vietnam, Angola, Togo and Nepal were other countries among the top 10 buyers of India’s non-basmati white rice.
  • In all, India exported the non-basmati white rice to 142 countries during 2022-23. Most of these countries were poor, and were located in Africa.
  • Before India banned the export of non-basmati white rice, 86-88 countries, mostly low-income economies, were buying over 4 lakh metric tonnes of this category of rice from New Delhi every month during April-June, 2023.
  • However, when New Delhi banned exports, the quantity of grain shipped out marginally declined to 3.8 lakh metric tonnes in July. It crashed in the following month—August (0.39 lakh metric tonnes). The number of countries importing Indian non-basmati white rice declined to 25.
Broken Rice
  • Before India banned export of broken rice in September last year, every month, 40 countries imported over 4 lakh tonnes of broken rice from India. After New Delhi banned the export of broken rice on September 9, 2022, the number of countries declined to 21 in September, and to 6 in October.
  • In the financial year 2022-23, India’s broken export stood at 30.49 lakh metric tonnes, of which a maximum 12.80 lakh metric tonnes was exported to China, followed by Senegal (10.26 lakh metric tonnes), and Indonesia (1.94 lakh metric tonnes).
Par-boiled Rice
  • The term par-boiled rice refers to the rice that has been partially boiled in paddy form before milling. There is no ban on export of this category of rice from India.
  • In 2022-23, India exported 78.48 lakh metric tonnes of par-boiled rice to 131 countries. Benin (9.69 lakh metric tonnes), Bangladesh (7.26 lakh metric tonnes), Guinea (7.07 lakh metric tonnes), Côte D’ Ivorie (6.97 lakh metric tonnes), and Togo (6.89 lakh metric tonnes) were the top five importers of the Indian par-boiled rice in the last financial year.
Husked (Brown) Rice
  • The husked (brown) rice is the type of rice from which only the husk has been removed, while the brown rice is unpolished rice.
  • A quantity of 11,656.86 metric tonnes of husked (brown) rice was exported from India during the financial year 2022-23, which was 76.80 per cent lower than the quantity (50,249 metric tonnes) exported in the year 2021-22. Netherlands, UK, USA, Saudi Arabia, and Canada were top 5 buyers of this category of rice during the last financial year.
Rice procurement, requirement
  • Total production of rice during 2022-23 is estimated to be at a record 1357.55 lakh tonnes. It is higher by 62.84 lakh tonnes than previous year’s Rice production of 1294.71 lakh tonnes and by 153.65 lakh tonnes than the last five years’ average production of 1203.90 lakh tonnes.
  • Procurement is on for the kharif marketing season (KMS) 2023-24. A quantity of 56.04 lakh metric tonnes of paddy has been procured from 8 states—Chhattisgarh, Haryana, Himachal Pradesh, Punjab, Tamil Nadu, Uttar Pradesh, Uttarakhand, and West Bengal.
Conclusion- As per the Food Corporation of India, a stock of 221.87 lakh metric tonnes of rice is available in the Central Pool as on October 1, 2023. In addition to this, a stock of 138.36 lakh metric tonnes of unmilled paddy (equal to 92.70 lakh metric tonnes of rice) is also available in the Central Pool, taking the total rice stock to 314.57 lakh metric tonnes. Syllabus- GS- 3; Economy; Agriculture Source- Indian Express