India Limits Rice Exports Over Production Worries as Domestic Prices Soar

The Indian government has already banned exports of wheat, wheat products, and sugar amid the growing food crisis in the international market. India exports rice to more than 150 countries, accounting for nearly 40 percent of global rice exports.

India's Commerce Ministry has amended the foreign export rules to bring broken rice under the prohibited category, with immediate effect.

The move was triggered by surging domestic prices, which has put food security under threat. According to industry estimates, paddy sowing during the ongoing season has been 6 percent lower than last year because of deficient rains in eastern parts of the country, resulting in higher prices in the domestic market.

"The share of broken rice in overall rice exports jumped to 23 percent from one percent in the past four years; the growth is abnormal. Domestic availability of this grain is almost ended," Sudhanshu Pandey, an official in the Department of Food said.

Financial services group Nomura, said on 30 August that soaring maize prices in the global market "prompted a shift towards using broken rice as animal feed, with rising feed costs adding to higher meat prices".

In a similar move, the Department of Revenue has also issued a separate notification, imposing a 20 percent export duty on unmilled rice, brown rice, and milled rice - except parboiled and basmati rice.

According to the Indian government, it has ample rice stocks to meet domestic demand, including for the free food grain scheme. Delhi supplies subsidized food grains to around 800Mln people under its public distribution system.

The development comes demand for rice has grown from countries including Iran, Bangladesh, Iraq, and Saudi Arabia.

Earlier this week, Bangladesh said the country had finalized imports of 530,000 tonnes of rice from India and Vietnam. The Sheikh Hasina government has planned to import 1.2 million tonnes of rice to replenish the food reserves and bring down prices of the staple for 170 million people.

China is the top buyer of broken rice, which uses it primarily for livestock feed. According to Indian officials, Beijing purchased 1.58Mln tonnes of broken rice in 2021-22 compared with 273,000 tons a year earlier.