Sudhanshu Pandey explains reason for government banning export of broken rice

Data sourced from various agencies show that in Financial Year 2021-22 (FY22) out of the 3.8-3.9 million tonnes of broken rice exported, around 1.6 million tonnes (over 41 per cent) went to China for use as feed meal.

India’s rice production this kharif season could reduce by 10-12 million tonnes due to a drought in four states and a shift towards other crops elsewhere, said food secretary Sudhanshu Pandey on Friday.

The preliminary estimate—it might change later due to good late rains—is the first official number on monsoon’s impact on kharif rice production in Uttar Pradesh, Bihar, Jharkhand, and West Bengal. In the 2021-22 crop year, India produced over 111 million tonnes of rice in the kharif season.

Pandey said the central government banned exports of broken rice on Thursday night as a “mind-boggling” increase had caused domestic shortage and increased poultry and feed meal rates. Broken rice is largely meant for the non-human consumption and it is used as a feed meal in the poultry industry.

Data sourced from various agencies show that in Financial Year 2021-22 (FY22) out of the 3.8-3.9 million tonnes of broken rice exported, around 1.6 million tonnes (over 41 per cent) went to China for use as feed meal.

“During April to August this year (FY-23), exports of broken rice has risen by a mind boggling 4178 per cent compared to the corresponding period of 2019, while between Fy-18 and Fy-19, too exports of broken rice from India has jumped by almost 319 per cent,” Pandey told reporters.

“We have kept parboiled rice and basmati rice outside the purview of any sort of restriction be it higher export duty or total ban because these are used for human consumption in several countries across the globe,” he said.

The share of broken rice in India’s total exports--estimated to be around 21.2 million tonnes in 2021-22--has increased to 23 per cent in April-August 2022 period compared to 1.34 per cent in the corresponding period in 2019.

Pandey said apart from easing a shortage in the domestic market, the export ban would ensure that the drawdown of rice from Food Corporation of India (FCI) inventories towards ethanol production is not huge.

“The ban on broken rice exports will also ensure that it is available for domestic ethanol manufacturing and the pressure on FCI rice to meet the needs of grain-based ethanol players is less,” said an industry representative from the grain-based ethanol manufacturing sector.

In full 2021-22, around 81,000 tonnes of broken rice was allotted from FCI’s godowns for ethanol production. The amount jumped to 1.4 million tonnes till August 2022 as broken rice was unavailable in the open market.

Pandey said between January 1 and September 8, broken rice prices had risen by 37.5 percent while maize prices have also gone up by 26.31 during the same period as broken rice is simply not available.

About the government imposing 20 per cent export duty on some rice types before the ban on broken rice, Pandey said that the step will help in lowering prices.

A government notification on banning the export of broken rice said that between September 9 and September 15, consignments and shipments where loading has started in the ports before the ban and shipping bills is filed of vessels berthed or where broken rice consignments have been handed over to the customs will be allowed to be exported.

This exemption has been granted to ensure that in-transit shipments and goods which have already left the hinterland do not pile up in the ports as was the case when wheat exports were banned on May 14, 2022.

Last evening, the Centre imposed a 20 per cent export duty on select rice varieties but kept major items like basmati out of its purview.