Economy
What India's 20 Per Cent Export Duty On Parboiled Rice Signifies
Rice (Representative image)
India has suddenly enforced a 20 per cent duty on parboiled rice exports, a decision poised to decrease shipments from the world's leading exporter, as reported by Asia Nikkei.
This move could potentially elevate global rice prices, which are already at their highest point in over a decade.
In a surprising move last month, India banned the export of commonly consumed non-basmati white rice, following a similar ban on broken rice exports the previous year. Consequently, some buyers turned to parboiled rice, causing its prices to surge to unprecedented levels.
Thus, the cost of Indian parboiled rice was set to be on par with rice sourced from Thailand and Pakistan, leaving buyers with limited options.
In 2022, India exported approximately 7.4 million tonne of parboiled rice. The United Nations food agency's rice price index reached its highest point in around 12 years in July, driven by strong demand and soaring prices in key exporting nations after India enforced export restrictions.
India is responsible for over 40 per cent of worldwide rice exports. Given that other exporters possess low inventories, any reduction in shipments could further inflate food prices, which have already been influenced by Russia's incursion into Ukraine the previous year and unpredictable weather patterns.
The report quoted a New Delhi-based dealer associated with a global trade house who stated that India has now placed restrictions on all types of non-basmati rice, typically favoured by less affluent consumers in Africa and Asia. The dealer predicted a rise in global rice prices after a recent period of moderation, which followed a more than 25 per cent surge due to India's previous restrictions.
These recent constraints on the export of food commodities underline the Indian government's sensitivity, led by Prime Minister Narendra Modi, to the issue of food inflation.
This concern is especially pronounced in light of the upcoming general election, expected in the coming year. The government, under Modi's leadership, had previously extended the ban on wheat exports and curtailed rice shipments in September 2022. Additionally, sugar exports were capped this year due to decreased cane yields.
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