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Indian rice traders hike prices to mirror higher export duty

Synopsis

India’s rice export prices increased this week due to higher duty on rice shipments, while Thailand’s demand remained low. The government imposed a 20% export duty on parboiled rice exports in August 2023 to control domestic rice prices. The customs department has demanded payment of duty differentials on rice exported in the last 18 months, which could cripple rice shipments from India.

Representative image.

Top exporter India’s rice export prices rose this week as traders factored in higher duty on rice shipments, while demand remained lacklustre in Thailand.

India’s 5% broken parboiled variety was quoted at $550-$558 per ton this week, up from last week’s $543-$550. Earlier this month, prices hit a record high of $560.

“We’ve had to raise prices since the government is considering the total transaction value instead of Free on Board (FOB) value to calculate the 20% export duty. This has pushed our export prices higher,” said a New Delhi-based dealer with a global trade house.

New Delhi imposed a 20% export duty on parboiled rice exports in August 2023 to control domestic rice prices.

Indian exporters have received notices from the customs department demanding payment of duty differentials on rice exported in the last 18 months, four exporters told Reuters, a rare tax demand that could cripple rice shipments from India.

Thailand’s 5% broken rice prices was quoted at $585-$590 per ton, down from last week’s $598.

Prices softened due to a weakening baht and demand, said a Bangkok-based trader, but added that Indonesian buyers supported prices.

Another trader said Vietnamese rice was cheaper and that local supply was coming to a seasonal end, although there was some paddy left.

Vietnam’s 5% broken rice was offered at $590-$595 per metric ton, unchanged from a week ago.

“Exporters have slowed down their purchases from farmers after an U.S. forecast saying earlier this month that the Philippines might reduce its imports this year on rising domestic supplies,” a trader based in Ho Chi Minh City said.

The Philippines is Vietnam’s largest rice export market.

Meanwhile, Bangladesh’s rice prices stayed elevated despite good yield and reserves.

Officials noted that Bangladesh could allow private traders to import as much as 200,000 tonnes of rice in an effort to cool domestic prices of the staple grain.

https://economictimes.indiatimes.com/news/economy/foreign-trade/indian-rice-traders-hike-prices-to-mirror-higher-export-duty/articleshow/108853020.cms?from=mdr QR Code

Published Date: March 28, 2024

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