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How India’s broken rice export ban will affect global food inflation?

rice export ban by India

After banning the export of wheat, India has also banned the export of broken rice. Its purpose is being told to control domestic food inflation. Along with this, the Center has imposed a 20 percent duty on the export of non-basmati grade rice, husked brown rice, and semi-milled rice. The Indian government has not increased the export duty on parboiled and basmati rice. Now only consignments up to 15th September are allowed to be exported. This is a relief for those who have already placed orders for their Broken Rice.

Why was the ban on broken rice exports imposed?

India is banning its exports because the Food Corporation of India has less stock of wheat and rice. India has a total reserve of rice and wheat of 52.3 million tonnes left in the central pool on 16 August.

Secondly, the rice-producing states of India, West Bengal, Bihar, and Uttar Pradesh have received less than average rainfall this year. Due to this, the sown area under the paddy has decreased which will result in less harvest. According to the data of the Ministry of Agriculture, the sown area of ​​paddy has declined by 5.62 percent to 383.99 lakh hectares in the current Kharif season so far.

What will be the effect on India?

With the increase in export duty, Indian rice will become uncompetitive in the world market. Rice exports stood at 21.5 million tonnes in the year 2021, which was more than the combined shipments of the world’s four largest grain exporting countries, Thailand, Vietnam, Pakistan, and the United States.

India's Rice export in 2021-22
India’s Rice export in 2021-22 (Figures In Lakh Metric Ton)

India’s rice exports will come down by 25 percent in the coming months after this ban. The 20 percent duty imposed by India will dissuade the buyers and they will be forced to buy rice from Thailand and Vietnam instead of India.

What will be the effect on the world?

India contributes 40 percent to the supply of rice to the world. India exports rice to more than 150 countries. The reduction in rice exports by India to these countries will increase food inflation in these countries. Those already affected by heat waves, drought, and the Russia-Ukraine war.

China is the largest buyer of broken rice from India, which bought 1.1 million tonnes of broken rice from India in the year 2021. China uses it for feeding purposes. After this, poor African countries like Senegal, and Djibouti buy broken rice from India for human consumption.

What is Broken Rice, and where is it used?

Actually broken rice is left over from the traditional drying and milling process. It is used in the pet food industry, livestock feeding, aquaculture, starch making, and for human consumption in many countries.

The price of Broken Rice is low. If it is used in cooking, it is a bit sticky and does not give the fun of whole rice grains. Although it is nutritious.

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