Govt may review blanket ban on broken rice exports if procurement steadies

Exports may still face some curbs with the imposition of a duty instead of the complete ban that is currently in place, but matters are still at a discussion stage, say sources

With rice procurement progressing steadily and with prices starting to moderate, the Central government might review the ban on the export of broken rice, though an outright lifting is ruled out for now, two people aware of the development said.

Exports may still face some curbs with the imposition of a duty instead of the complete ban that is currently in place, but matters are still at a discussion stage, they added.

India, the largest exporter of broken rice, had imposed the ban in September to stabilise domestic prices and ensure the availability of the grain in the domestic market particularly for the ethanol and poultry industries.

Prior to the ban, broken rice exports between April and August of FY23 has risen by a mind-boggling 4,178 per cent from the corresponding period of 2019, while between FY18 and FY19, thay had jumped by almost 319 per cent.

Data shows that in FY22, 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 for the poultry industry there.

The share of broken rice in India’s total exports—estimated to be about 21.2 million tonnes in 2021-22—rose to 23 per cent in April-August 2022 from 1.34 per cent in the same period in 2019.

However, some softening of domestic prices, a steady start to 2022-23 rice procurement season and demand from southern millers may have prompted the Centre consider revoking the ban, sources said.

Till November 10, paddy procurement in the central pool for the 2022-23 season that started on October is estimated to be about 23.1 million tonnes--1.31 per cent more than the paddy procured during the same period last year.

In the 2022-23 season (October to September), the Centre has planned to procure 77.1 million tonnes of paddy which is more than the 75.9 million tonnes procured last year.

Meanwhile, sources said the commerce and industry minister Piyush Goyal had discussed the matter during a review of the sectoral progress in exports with export promotion councils and industry bodies.

“The industry had expressed their concerns regarding the continuation of the ban on broken rice,” one of the persons cited above said.

Market sources said India annually produced around 5-6 million tonnes of broken rice which is mainly used as poultry and cattle feed.

India’s rice production in 2022-23 kharif season is estimated to be around 6.05 per cent less than the same period last year at 104.99 million tonnes as per the first advance estimate of agriculture production for 2022-23 crop year (July to June) released a few months back.

Rice production in the 2021-22 kharif season was a record 111.76 million tonnes.

If the numbers hold firm, then this will be the lowest rice production in the kharif season since the 2020-21 crop year.

The production is expected to be down due to drought like conditions in main growing regions of East India namely in the states of UP, Bihar, Jharkhand and West Bengal and also shift towards other competing crops in some other states.

Date: 17-Nov-2022
https://www.business-standard.com/article/economy-policy/govt-may-review-blanket-ban-on-broken-rice-exports-if-procurement-steadies-122111601261_1.html