By Gurpreet Singh Nibber.

The ban led to a buildup of rice stocks and a sharp decline in international prices. Before the ban, India regularly exported 10 to 12 lakh tonnes of broken rice, but with the restriction in place, trade shifted to countries like Vietnam, Thailand and Pakistan.

Chandigarh

The Director General of Foreign Trade’s (DGFT) recent decision to allow the export of broken rice is seen as a vital step in tackling the storage issues plaguing producer states, including Punjab.

DGFT, the licencing authority for exporters, importers and export and import businesses in India, in a notification on 7 March amended the export policy of broken rice from ‘prohibited’ to ‘free’ with immediate effect. The restriction had been in place since September 2022.

The ban led to a buildup of rice stocks and a sharp decline in international prices. Before the ban, India regularly exported 10 to 12 lakh tonnes of broken rice, but with the restriction in place, trade shifted to countries like Vietnam, Thailand and Pakistan.

India’s export of broken rice fell drastically in the 2023-24 financial year, down from $1.13 billion in 2021-22 to nearly negligible levels. The international market continues to have strong demand for broken rice and with a surplus of 20% broken rice in India, prices have sharply dropped, affecting the rice industry.

According to Ranjit Singh Jossan, vice-president of the Punjab Rice Industry Association, the resumption of exports is expected to revitalise trade and mitigate the negative impacts of the surplus.

Punjab is facing a severe storage crisis, with its granaries overflowing. At present, 145 lakh tonnes of foodgrains are stored and the state is set to procure an additional 120 lakh tonnes of wheat starting April 1. Punjab’s granary capacity is only 174 lakh tonnes, putting immense pressure on storage facilities.

“We are moving foodgrain stocks to consumer states every month. At least 6 to 7 lakh tonnes of paddy and 7 to 8 lakh tonnes of wheat is moved out of the state every month,” he added, requesting anonymity. The opening of broken rice export will help ease storage problems, said a senior official, requesting anonymity.

The Union ministry of consumer affairs has initiated a pilot project in Punjab to segregate broken rice from the stocks handed over to the Food Corporation of India (FCI). This project will remove 15% of the stock by separating 10 kg of broken rice from every 100 kg of paddy. This move is expected to reduce the storage burden and improve the quality of rice supplied through the public distribution system (PDS), said officials.

The paddy stocks have permissible limits of 25% broken rice when shelled, which has now been mandated to be separated by the Union ministry. From 100 kg of paddy, 67 kg of rice is recovered, which has 17 kg (25%) broken rice content out of which 10 kg broken rice will be separated to be sold to rice processing and ethanol industry. The remaining 7 kg of broken rice will be mixed with stocks for the Public Distribution System (PDS). “With this, we will straight away get rid of 15% of the stock, which means requirement for lesser storage space,” said the state food department official.

Space crunch is leading to slow delivery of rice by millers to the FCI. In a communication sent to the FCI, the state food and supplies department pointed out that only 32% of the custom-milled rice could be delivered as the corporation stated that it did not have space. Ideally, all rice is to be delivered to the FCI by March 31.

Published Date: March 12, 2025