India opens up non-basmati rice exports to boost global supply

India has given the green light for the resumed exports of white non-basmati rice as stocks in the world’s largest grain exporter surge and farmers prepare for a new harvest in the next few weeks.

The traders stated that increased rice exports from India will boost global supplies, and lower international prices, by forcing Pakistan, Thailand, and Vietnam, which are major exporters, to lower their rates.

A government order stated that New Delhi had set a $490 floor price per metric tonne for non-basmati exports of white rice. The government had cut the white rice export tax to zero the day before.

New Delhi's decision allowing traders to sell nonbasmati white rice worldwide follows a series moves to ease export restriction on premium aromatic basmati varieties and parboiled varieties. India reduced its export duty for parboiled rice from 20% to 10% on Friday.

The government lifted a price floor for exports of basmati rice earlier this month to assist thousands of farmers who complained of a lack access to lucrative markets overseas such as Europe and the Middle East.

India, fearing a poor monsoon season due to the El Nino weather pattern, imposed various restrictions on rice exports in the past year. These were extended into 2024 as a way to control local prices ahead of the national elections of April and June.

Stocks at government warehouses have increased since the ban on exports in 2023.

The Food Corporation of India, the country's state-owned rice producer, had 32.3 million metric tonnes of rice on hand as of September 1, a 38.6% increase over last year. This gives the government plenty of room to relax the export restrictions.

Farmers planted rice on 41.35 millions hectares (102.18 acres), an increase from 40.45 (99.95 million acres) last season and an average of 39.09 (99.09) million (99.09) acres over the past five years.

Rajesh Paharia Jain is a New Delhi-based merchant who believes that the decision to allow the export of non-basmati will increase farm incomes and help India gain its position on the global market.

B.V. Krishna Rao said that despite the 10% export tax and the $490 floor price per metric ton of parboiled rice, Indian white rice would be competitive on the international market. (Reporting and editing by Mark Heinrich, Helen Popper and Sethuraman N Rajendra Jadhav)

(source: Reuters)