India Continues to Feed Strategic Partners Despite Ban on Rice Exports

tendata blogTrade Policy

ten data blog04-02-2024

rice exports,india rice exports,india ban rice exports



Despite the ban on rice exports, India continues to feed the world, especially its strategic neighbors such as Nepal, Bhutan, Sri Lanka, Maldives, Malaysia, Indonesia, Vietnam and Iran, as well as the wider ASEAN region.


According to government data analyzed by Mint, rice exports to South Asian countries alone reached $567 million in the first eight months of fiscal 2023-24, compared to $1.24 billion in the same period last year.


For ASEAN countries, rice exports during April-November 2023 amounted to $341 million as compared to $541 million during the same period in 2022. The South Asian countries mentioned above are not part of ASEAN.


The data suggest that rice is exported to these countries under bilateral arrangements despite the ban, but prices may not be comparable.


Exports are made at the government-to-government level and are facilitated by the National Cooperative Exports Limited, a government export agency set up under the Multi-State Cooperative Societies (MSCS) Act, 2002, for export of agricultural products and agro-allied items.


However, industry leaders predicted that the ban would control the prices of basic food items and distribute free rice to Prime Minister Garib Kalyan Anna Yojana's beneficiaries for the next five years.


Rajnikant Rai, chief executive officer of ITC's agribusiness division, said, "The government has done a commendable job in controlling domestic prices and making food available to neighboring countries."


Rice exports to key neighboring country Iran increased by 1,314 percent to $60 million in November 2023 from $4.25 million in October, while oil meal exports to the country increased to $46.52 million in October 2023 from $1.22 million in October 2023. The data showed an increase of 3,713 percent in November.


Overall rice exports to South Asian countries grew 478% in November 2023 over October, government data showed.


India exported rice worth $940,000 to Bhutan in November, up 21% from $780,000 in the previous month.


Rice exports to Nepal were valued at $5.77 million in November, compared to $3.64 million in October.


In the ASEAN region, Vietnam's rice exports increased the highest by 171.43 percent to $14.63 in November 2023 from $5.39 million in October. Indonesia imported Indian rice worth $1.8 million in November from $1 million last year.


Till date, the government has approved export of 2.77 million tons of non-Indian aromatic rice to 14 major Asian and African countries including Singapore, Nepal, Malaysia and the Philippines.


Apart from white rice, India on November 30 allowed export of 14,184 tons of wheat, 5,326 tons of atta, 15,226 tons of maida and 48,804 tons of broken rice to Bhutan. On the same day (November 30), broken rice exports were allowed to Mali (100,000 tons), Senegal (500,000 tons), Gambia (50,000 tons) and Indonesia (200,000 tons).


India imposed a ban on wheat and its products, such as atta, suji (coarse-grain wheat flour) and maida, in May 2022 and on broken rice in September 2022. The Government of India banned the export of non-agricultural products in July 2023 due to increased inflationary pressures caused by soaring food prices. - Indian parboiled rice, imposed a 20 percent export tax on steamed grain rice, and set the minimum export price (MEP) for Indian parboiled rice at $1,200 per ton in August 2023.3 The government also imposed a ban on the export of rice from India.


The rice ban was necessitated by the sharp rise in the prices of major staple grains due to the reduction in public stocks in the Central Reserve Bank.


However, after the ban was implemented, the price of rice in the global market rose sharply, leading India's strategic partners to start demanding foodgrains in batches. Later in October 2023, MEP revised the price of Indian spices to $950 per ton.


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