An statement from the finance ministry on Friday said that India has made the decision to impose a 20% levy on parboiled rice in order to further limit rice exports. This action comes after a previous prohibition on the shipment of broken rice and non-basmati white rice, which was announced in September 2022 and the month before, respectively. These steps were adopted in reaction to the rising cost of this crucial food item.
The Indian government was first said to be contemplating imposing a 20% export levy on non-basmati parboiled rice, according to a report that was made public on August 22. In an attempt to combat the continued inflationary pressures that have been worsened by growing expenses, the main goals of this action are to stabilize prices and improve domestic market inventories.
Rice prices in the nation continued to be an issue despite the government’s ban on the export of non-basmati white rice in July, which took place three days after Russia withdrew from the Black Sea grain agreement. Since April, the cost of parboiled rice has increased by 19% on the local market and by 26% on the global one. This rice variety’s export volume and value have both grown by over 35% and 21%, respectively.
Currently, basmati rice costs between Rs. 92 and 93 per kilogram in India, whereas the average retail price for parboiled rice is between Rs. 37 and 38. According to traders, the cost of parboiled rice at free-on-board (FoB) is around $500 per tonne, with basmati types costing up to $1,000 per tonne. About 25–30% of the world’s parboiled rice commerce comes from India.
The cost of rice has increased dramatically due to inflation, with retail inflation going from 4.3% in July of last year to 12.96% in July, a rise from 12% in June.
Economically underprivileged people in nations like Bangladesh and Nepal, who mainly rely on Indian white rice, have been particularly hard impacted by the export prohibition. African countries like Benin, Senegal, Togo, and Mali, which import broken rice largely because of its affordability and great satiety, have also been severely impacted.
Global rice prices have seen a noteworthy surge of 15–25% as a result of India’s export limitations from the previous month. As a result of higher price bids from India’s rivals like Thailand, Vietnam, and Pakistan, as well as their necessity for local consumption, West African nations have been forced to switch to adopting Indian parboiled rice.
According to official statistics, this change in demand has caused India’s parboiled rice exports to clearly increase during the current fiscal year, reaching close to 3.1 million metric tons compared to the 2.58 million metric tons reported in the same time of the previous fiscal year.