By Vivek Waghmode.

Chennai: India may struggle to regain its lost market for broken rice after lifting its export ban on March 7, according to traders and analysts, reports The Hindu Businessline.

“It will be difficult for India to reach the same level of broken rice exports as before the ban,” said Rajesh Paharia Jain, a New Delhi-based exporter.

The government had halted broken rice exports in September 2022 due to rising food prices and concerns over reduced kharif crop yields following poor rainfall.

“The government lifted the ban because domestic rice prices have fallen considerably,” said S. Chandrasekaran, a trade analyst based in New Delhi.

Rice prices in the global market have hit their lowest levels in over two years. Meanwhile, India has accumulated record rice stocks, with warehouses holding 36.7 million tonnes as of March 1, 2025.

“Indian broken rice is costlier than rice from Myanmar and Pakistan, with Indian exporters quoting $360 per tonne,” said M. Madan Prakash, Director of Rajathi Group, a company that exports agricultural products.

The Vietnam Food Association reports that Vietnam and Pakistan are offering 100% broken rice at $307 per tonne, while Thailand’s price is $354 per tonne.

In the 2021-22 fiscal year, India exported a record 17.26 million tonnes of non-basmati rice, including 3.89 million tonnes of broken rice.

One of the major challenges for India’s broken rice exports is the growing demand from the domestic ethanol industry. “Much of the broken rice supply is now being used for ethanol production,” said Prakash.

The Food Corporation of India (FCI) has been selling broken rice under the open market sale scheme at ₹2,250 per quintal since January. Ethanol distilleries can purchase up to 2.4 tonnes at this rate.

Jain explained that during the COVID-19 pandemic, India benefitted from reduced rice production in other countries, which saw output drop by 20-30%. At the same time, India’s ethanol plants were still being built. “Now that these ethanol plants are operational, they will continue to absorb broken rice supplies,” he said.

Apart from ethanol, broken rice is also in demand from the poultry industry, which is using it as a substitute for the more expensive maize, according to Chandrasekaran.

Even though India has re-entered the export market, winning back customers will not be easy. “Many buyers have shifted to other suppliers, and regaining their confidence will take time,” said a South India-based exporter.

Jain pointed out that during the COVID-19 period, rice distributed through the public distribution system (PDS) was diverted to other markets. “Although the trend has slowed, it continues post-pandemic,” he said.

During the pandemic, the price gap between 25% and 100% broken rice was small. However, today there is a significant difference of $50-60 per tonne in free-on-board (FOB) prices. For instance, Vietnam currently quotes 5% broken white rice at $390 per tonne and 100% broken rice at $307 per tonne.

With India resuming broken rice exports, prices are expected to decline further. However, except for Thailand, prices in other countries have risen slightly this week.

Jain noted that Indian exporters are now selling more 25% broken rice as a cost-effective alternative. “Some shipments have even included 45% broken rice,” he said.

Although the export ban was in place, India continued to allow government-to-government sales, especially to African nations like Senegal. “India has an advantage in exporting to African countries like Senegal, Gambia, and Mali due to lower freight costs. Meanwhile, ASEAN nations are focusing on Indonesia and China,” Jain said.

However, to stay competitive, India may need to lower its prices or risk losing market share to its Asian neighbors.

China is increasingly sourcing broken rice from Vietnam, which offers lower prices and freight costs.

Jain stated that India’s rabi harvest could drive prices down further as FCI procurement remains low. The Ministry of Agriculture has projected rabi rice production at 15.75 million tonnes, up from 14.6 million tonnes last year. Kharif rice production has been estimated at a record 120.6 million tonnes, compared to 113.26 million tonnes the previous season.

Overall, India’s broken rice exports are expected to remain lower than the 2021-22 levels due to the strong demand for ethanol production. “Exports could range between 1.2 and 1.6 million tonnes, but if China increases its purchases, the figure may rise to 3 million tonnes,” said Jain. He also noted that some shipments of 100% broken rice may now be blended into consignments of 25% broken rice.

Chandrasekaran criticized the government’s approach to reopening rice exports, stating, “The government should have phased these policy changes gradually instead of implementing them all at once.”

Published Date: March 13, 2025