MUMBAI: India banned exports of broken rice and imposed a 20% duty on exports of various grades of rice on Thursday as the world’s biggest exporter of the grain tries to augment supplies and calm local prices after below-average monsoon rainfall curtailed planting.
India exports rice to more than 150 countries, and any reduction in its shipments would increase upward pressure on food prices, which are already rising because of drought, heat-waves and Russia’s invasion of Ukraine.
The new duty is likely to discourage buyers from making purchases from India and prompt them to shift towards rivals Thailand and Vietnam, which have been struggling to increase shipments and raise prices.
The government has excluded parboiled and basmati rice from the export duty, which will come into effect from Sept. 9.
New Delhi also banned exports of 100% broken rice, which a few poor African countries import for human consumption, though that variety is mainly used for feed purposes.
The duty will affect white and brown rice, which account for more than 60% of India’s exports, said B.V. Krishna Rao, president of the All India Rice Exporters Association.
“With this duty, Indian rice shipments will become uncompetitive in the world market. Buyers will shift to Thailand and Vietnam,” Rao said. India accounts for more than 40% of global rice shipments and competes with Thailand, Vietnam, Pakistan and Myanmar in the world market.
Below-average rainfall in key rice-producing states such as West Bengal, Bihar and Uttar Pradesh has raised concerns over India’s rice production.
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