Rice stuck at Indian ports after rice export ban & duty imposition – South Asia Time

Rice stuck at Indian ports after rice export ban & duty imposition

 September 12, 2022  

New Delhi — Indian government has recently banned the export of broken rice with immediate effect.   Government has imposed  20 per cent export duty on non-Basmati rice, except for parboiled rice, to boost domestic supplies.

Reuters report has revealed that nearly one million tonnes of grain is trapped at Indian ports as buyers refuse to pay the government’s new 20 per cent export duty.

“The duty became effective from midnight, but buyers are not ready to pay the duty. We have stopped loading vessels.” B.V. Krishna Rao, president of the All India Rice Exporters Association (AIREA) was quoted as saying by the publication.

According to AIREA, approximately 750,000 tonnes of rice that can be exported is lying at the Indian ports. However, with margins wafer-thin in the rice business, the buyers are not willing to pay the duty and the rice bound for Benin, Sri Lanka, Turkey, and the United Arab Emirates remains stuck.

Additionaly, at least 350,000 tonnes of broken rice is lying at numerous ports scattered across India. The logistics do not dictate that the rice could be sent back into the hinterland for selling purposes.

With the complete export ban imposed on broken rice, the future of the stock hangs in balance as exporters await some relaxation from the government regarding rules.

The government was forced to put a restriction on rice export as the production has not been up to par. Reports suggest that there could be a drop of 10-12 million tonnes in the Kharif season as rain deficit across different rice-producing states had hit the crops hard.

Notably, India is the largest exporter of rice globally and any restriction by the Indian government is expected to impact the international market. In 2021, the country exported over 21 million tonnes of rice. However, due to the restrictions and low yield, only 10 million tonnes will hit global supplies.

(With inputs from agencies)