Exporters complain Andhra’s move to check smuggling of ration rice delaying shipments.

By Subramani Ra Mancombu

Andhra Pradesh’s bid to check smuggling of non-basmati rice meant for distribution through ration shops has resulted in export of the cereal from the Kakinada port coming to a halt and being diverted to other ports, exporters and traders said.

The State government has begun a similar exercise near the Visakhapatnam port too, leading to exporters raising concerns over the curbs. Such restrictions are causing quite a few problems that shippers are diverting their consignments to other ports such as Kandla or Chennai, pushing up transportation costs. 

“White rice made up 60 per cent of the total exports of the cereals from Kakinada. Almost the entire white rice exports have now been diverted to other ports. The problem of ration rice smuggling is mainly related to white rice,” said a South India-based trading source, who did not wish to be identified.

Three States

Rajesh Jain Paharia, State Vice-President of Indian Rice Exporters Federation (IREF), told a television channel that Kakinada and Visakhapatnam ports are catering to the export of rice from Chhattisgarh, Telangana and Andhra Pradesh. 

“Checkposts and barriers put up to check smuggling of ration rice have resulted in transporters refusing to carry rice cargo,” he said. 

IREF National Prem Garg said, in the same programme, that the grain was being checked to ensure fortified rice was not being smuggled out. 

“But fortified rice is being sold in the open market. Exporters shifted to Visakhapatnam from Kakinada due to this problem. Now, they may have to shift to Chennai or Kandla or Jawaharlal Nehru Port Trust, Mumbai. Transportation costs are increasing as a result,” he said. 

‘SOPs in place’

Exporters say the Andhra Pradesh government should stop the diversion of rice from ration shops rather than targeting exporters. 

“Exporters have held meetings with Commerce Ministry Officials, including the Agricultural and Processed Food Products Export Development Authority of India (APEDA), and Andhra officials and standard operational procedures (SOPs) have been formulated, but nothing has improved,” Mukesh Jain, an exporter from Chhattisgarh, told the channel.

When contacted, Visakhapatnam Port Chairman M Angamuthu told businessline that SOPs were in place from the Andhra Pradesh side and all stakeholders have been “sensitised”. 

Paharia Jain said an ecosystem for exports of rice has been created and over 50,000 people depend on it in the form of labour, truck drivers,  surveyors, barge crew and stevedores.  “They will go jobless if such restrictions are levied, and it will affect their livelihood,” he said.

Chamber’s advisory

The issue of Andhra Pradesh’s regulation affecting exports began sometime in December 2024, and a ship got held up at the Kakinada port. “The loading on at least four ships has been affected now,” said Paharia Jain.

In December 2024, the Coconada Chamber of Commerce issued an advisory to logistics service providers and handlers to avoid rendering services to exporters of white rice. 

The South India-based trading source said the State government filed first information reports (FIRs) against the diversion of ration rice against a few people, but nothing has progressed yet.

“The officials took action claiming that these people violated the Essential Commodities Act. But no progress has been made as they are not sure under which provisions of the Act they have to file the cases in the court and proceed further,” said the source. 

To hit marker share

According to Mukesh Jain, such curbs could force India to lose market share to Thailand, Vietnam and Pakistan. 

“The Chhattisgarh government sold 32 lakh tonnes of surplus paddy in the open market, and millers purchased it. They have a declaration that the rice is not from the public distribution system. The consignments are certified by global inspection companies, but the Andhra Pradesh government officials’ actions are perplexing,” he said.

Paharia Jain said putting controls at the end of the chain, which involves exporters, are hurdles for the trade. “Kakinada and Visakhapatnam Ports will stand to lose after making huge strides in the past 3 decades,” he said.

Traders said exports are being made after availing of bank loans and paying Goods and Services Tax, and the Andhra Pradesh government should consider this. 

Overflowing granaries

“We have surplus rice and are looking to export. These hurdles will hurt us in the long run,” said the South India-based source, adding that exporters are being made victims of local politics.

The Food Corporation of India is currently holding a record high inventory of rice at nearly 40 million tonnes, in addition to 32.25 million tones of paddy that can yield nearly 22 million tonnes of rice. 

The record inventories are on the heels of India producing a record 149.07 million tonnes of rice in 2024-25 crop year.  

Andhra Pradesh officials are not willing to comment, but they point out that at least 2,000 tonnes of rice diverted from ration shops had been seized. 

Buyer’s market

They say that the probe into cases of diversion of PDS rice is progressing as per law. A special investigation team set up to investigate the cases of illegal export of ration rice is set to complete its probe. 

Meanwhile, India’s parboiled rice prices are down to near 2-year low as competing nations such as Thailand and Pakistan are offering stiff competition. White rice prices, on the other hand, are at multi-year low as Vietnam, Thailand, India, Pakistan and Myanmar are competing in a market where the demand is slack. 

“It is a buyer’s market out there. We have to wait until those holding inventories exhaust them. To start with, Bangladesh plans to buy 4 lakh tonnes of rice from India,” said the South-India based source. 

Published Date: July 19, 2025