India Lifts Rice Export Restrictions: Prices Expected to Rise
New Delhi, India – October 2: Rice prices are showing signs of increasing after India removed restrictions on exports, opening new business opportunities for exporters. This move has helped Indian rice exporters regain their competitiveness in overseas markets.
According to traders, prices for both basmati and non-basmati white rice are currently lower compared to last year, but they expect prices to rise soon. Last year, basmati rice was priced at Rs 3,500 per quintal, but it is now at Rs 3,100-3,200, up from Rs 2,800-2,900 after the trade barriers were lifted in late September.
India is the leading exporter and grower of basmati rice, followed by Pakistan. Rahul Chauhan, Director of IGrain India, a leading agri commodity research firm, mentioned that the increase in prices might not be stable due to good crop production this year. Akshay Gupta, Head of Bulk Exports at KRBL Limited, which sells basmati rice under the ‘India Gate’ brand, agreed and said that global rice prices will likely fall as India re-enters the market strongly.
Gupta added that the Indian rice industry is happy with this decision. Out of the 16 million tons of non-basmati rice exported from India, 9 million tons were white rice, and 7 million tons were parboiled rice. The market for white rice is now open for Indian exporters, and parboiled rice has become more competitive with a reduced export duty of 10% instead of 20%.
Anshul Garg, Director and CEO of Haryana-based Aroma AAT Basmati Rice, believes that removing the Minimum Export Price (MEP) was a timely move to boost basmati rice exports. Garg said that with the new rice season approaching, the MEP removal is helping exporters trade basmati rice at competitive rates against international competitors.
According to the Agricultural and Processed Food Products Export Development Authority (APEDA), India exported 5.2 million tonnes of basmati rice worth Rs 48,389.18 crores in 2023-24. Major export destinations included Saudi Arabia, Iran, Iraq, UAE, the US, and Yemen.
Vikram Marwaha, Joint Managing Director of DRRK Foods, believes that several countries that kept lower buffer stocks last year due to high costs may replenish their stocks this year, increasing demand for Indian rice. Marwaha expects paddy prices to stay above the Minimum Support Price (MSP) as fresh paddy arrives in markets, benefiting Indian farmers.
Other market participants noted that rice prices in other key growing nations competing with India have started to drop as India re-enters the market with fewer barriers. Last year, only government-to-government export of non-basmati white rice was allowed to ensure food security. Key buyers of Indian non-basmati rice include UAE, Nepal, Bangladesh, China, and several African countries.
India had banned rice exports in July 2023 to control domestic inflation and ensure food security. This ban has now been eased by removing the MEP on basmati rice, allowing the export of non-basmati white rice with a minimum export price of USD 490 per tonne, and reducing the export duty on parboiled rice to 10% from 20%.
Doubts Revealed
Rice Export Restrictions -: These are rules that the government puts in place to control how much rice can be sent to other countries. They do this to make sure there is enough rice for people in India.
Prices Expected to Rise -: This means that the cost of rice is likely to go up. When something is expected, it means people think it will happen soon.
Competitiveness -: This means being able to do well compared to others. In this case, it means Indian rice sellers can now do better in selling rice to other countries.
Basmati and Non-Basmati White Rice -: Basmati rice is a special type of long-grain rice that smells nice and is often used in biryani. Non-basmati white rice is regular rice that doesn’t have the special smell.
Rahul Chauhan -: He is a person who works at IGrain India, a company that deals with grains like rice.
Akshay Gupta -: He is a person who works at KRBL Limited, a company that is one of the biggest sellers of basmati rice.
Saudi Arabia, Iran, and the UAE -: These are countries in the Middle East where a lot of Indian rice is sent. Saudi Arabia is famous for its deserts, Iran for its ancient history, and the UAE for its tall buildings.