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Rice Export Curb
A sudden crop failure that led to poor procurement and the depletion of public inventories prompted the government to impose a four-month-old export restriction on wheat.
As a result of worries that a situation akin to this would occur, it has now also placed restrictions, though not a complete ban, on rice supplies.
Rice exports fall into four categories. Out of them, basmati rice and parboiled non-basmati rice still have free export restrictions.
The rice is soaked in water, steamed, and dried while maintaining its outer husk during the parboiling process. As a result, the rice gets tougher and mills less easily.
Only the other two—raw (white) and broken non-basmati rice—are subject to limitations.
The imposition of a 20 percent levy on rice exports other than parboiled and basmati rice has been announced by the Department of Revenue in the Ministry of Finance.
Later, the Ministry of Commerce and Industry outlawed the export of all cracked rice in another announcement.
As a result, even for raw non-basmati, only entire grain consignments could be exported with the payment of a 20% duty.
Less than half of India's rice exports in terms of quantity and more than a third in terms of value will be impacted by the announced limitations.
India exported a record 21.21 million tonnes (mt) of rice worth $9.66 billion in 2021–22 (April–March).
This includes 17.26 mt of non-basmati cargoes valued at $6.12 billion and 3.95 mt of basmati rice worth $3.54 billion, for which there are no limits.
Exports of parboiled rice made up 7.43 mt ($2.76 billion) of the latter and will likewise be freely permitted.
The limitations only apply to the remaining $9.83 mt ($3.36 billion) of assets.
This includes 5.94 mt ($2.23 billion) of non-parboiled non-basmati rice and 3.89 mt ($1.13 billion) of broken rice, the export of which has been outlawed.
Non-parboiled, non-basmati rice shipments will now be subject to a 20% tariff.
Possible reduction in rice output levels
Because of insufficient monsoon rainfall in Uttar Pradesh, Bihar, Jharkhand, and Gangetic West Bengal, it's possible that India's rice production could decline dramatically.
In comparison to the same time last year, farmers planted 2.1 million less hectares (mh) of rice during the current kharif farming season, which runs from June 1 to September 9.
If yields in Punjab and Haryana prove to be lower as a result of a new virus that has caused dwarfing of paddy plants in numerous areas there, rice production would further decrease.
At 26.65 mt, public wheat stocks on August 1 were at their lowest level for this date in 14 years.
The government is concerned about their depletion in the case of a poor kharif harvest, even though the same for rice, at 40.99 mt, was very comfortable.
Given the political pressure to extend the free-food-grains programme (Pradhan Mantri Garib Kalyan Anna Yojana) past September, this is especially true.
Because there is so little wheat in government godowns, rice is what keeps the public distribution system afloat (PDS).
With its 21 mt or more of shipments in 2017, the nation exported 40 percent of the world's total rice.
It was far superior to Pakistan (1.6 mt), Vietnam (6.6 mt), and Thailand (7.2 mt) (4.8 mt).
Last year, Iran and the countries of the Arabian Peninsula received more than 75% of the basmati exported. Another 10% was contributed by the US, UK, Canada, and Australia combined.
Nearly 55% of non-basmati rice was sent to African nations.
Parboiled rice makes up the majority of exports to Bangladesh and Africa, whereas broken rice, which is currently prohibited in China, made up the majority of imports.
Source: The Indian Express