Detention at JNPT, Munda and Kandla follows businessline’s report of irregularities in such shipments violating ban on exports of white rice

By Subramani Ra Mancombu

Over 400 organic rice containers have been detained by Directorate of Revenue Intelligence (DRI) personnel in JNPT, Mundra and Kandla ports following businessline’s report of alleged irregularities in the shipments.

Trade sources said non-organic white (raw) and parboiled (boiled) rice have been exported in the guise of organic rice. As a result, shipments of organic rice during April-July 2024-25 fiscal (1,46,585 tonnes) exceeded the total shipments during the previous fiscal (1,07,727 tonnes).

These shipments (1,27,120 tonnes of white rice, 8,000-odd tonnes of broken rice) were made in violation of the ban on white (raw) and broken rice exports from India since July 2023. Unscrupulous shippers have also dodged the 20 per cent export duty on parboiled (boiled) rice. The duty evasion is reported to have exceeded ₹160 crore between October 2023 and July 2024.

Vessel halted

Trade sources, speaking on the condition of anonymity, said of the total shipments detained by the DRI, over 200 have been made in JNPT alone. 

The sources said as per data 22,126 tonnes and 16,547 tonnes of organic rice shipments set sail for Vietnam and Kenya but hardly 2,,000 tonnes reached their destinations.  

A South India-based exporter said the Customs Department has stopped merchant vessel mv Della from setting sail on the issue of non-organic rice being shipped out as organic rice. “Vietnam received less than 2,000 tonnes of organic rice shipments from India, while Kenya did not receive a single tonne of organic rice. In Kenya, the rice consignments have been recorded as non-organic rice. The Vietnam consignments seem to have been diverted elsewhere or misdeclaration has been made,” a source with access to data said. 

Origin Sikkim?

These purchases were made at $491/tonne by Vietnam and $475 by Kenya — at levels of non-organic white rice price quoted by competitive nations such as Pakistan and Myanmar. 

As per data, last fiscal, Vietnam bought 34,152 tonnes at an average $466 a tonne last fiscal, when even non-organic white rice prices ruled over $500 last fiscal due to global shortage. Kenya did not import a single grain of organic rice last fiscal.  “These are some interesting data that the Centre needs to probe,” the source said.

A South India-based exporter said some of these shipments were shipped out as rice grown in Sikkim, a fully organic State. Sources said the Commerce Ministry officials called up two certification bodies, which certify a produce to be organic for exports — based in Sikkim and Jaipur, Rajasthan, and questioned them. Over two such certification agencies are involved, they said. 

‘Fly-by-night’ operators

Another South India-based exporter said these exports have been made by “fly-by-night” operators. “We were approached to ship out non-organic white rice as organic rice but we refused,” the exporter said. 

The source with data said preliminary information suggests that the documents for the “fake” organic rice shipments “originated” from Bihar and Odisha. 

The source said many in the trade wonder how officials of the Customs Department allowed the shipments. “But you have to bear in mind that Customs officials go by Agricultural and Processed Food Products Export Development Authority (Apeda’s) provisional transaction certificates (TCs). Did anyone in Apeda check if the final TCs conformed to the volume of shipments?” the source asked.

TRACENET access

Other trading sources said though some may question the Customs officials checking parboiled shipments to ensure white rice was not shipped out through “misdeclaration”, it was done as no such certification is involved.  “Customs officials did not permit steamed and idly rice too as it did not treat them as parboiled rice. How can Customs check when large volumes are cleared by Apeda?” a second trading source said. 

The source said Customs officials cannot access Apeda’s Tracenet which can provide details of the TCs issued. “Tracenet has provisions to show only final TCs. That could have been a handicap for the Customs. Apeda too has provisions to check only final TCs,” the source said. 

The Centre should come up with provisions to link TRACENET and ICEGATE to prevent such “illegal” shipments, trading sources said. 

Prime face evidence

Trade sources said the government authorities, including DRI and Apeda, swung into action within hours of businessline’s report that there was “something fishy” over the exports of organic rice from the country. 

They said there has been prima facie evidence, based on data, and this is being supported by details from Vietnam and Kenya.

Some exporters allegedly resorted to the irregularities in export of organic rice from Kandla, Mundra and JNPT ports after Chennai and Tuticorin Custom officials cracked down following a businessline report that white rice exports were being under-invoiced.

The Centre began curbing rice exports from September 2022 as production in key-growing regions was affected by prolonged dry periods and deficient rainfall. 

Published Date: August 20, 2024