Even though India has prohibited the export of rice, it still plays a crucial role in providing sustenance to various nations, particularly its key neighbors like Nepal, Bhutan, Sri Lanka, Maldives, Malaysia, Indonesia, Vietnam, and Iran, as well as the broader Asean region.
As per information studied by Mint from government sources, the export of rice to South Asian nations reached $567 million during the initial eight months of the current fiscal year (2023-24), a notable decrease from the $1.24 billion recorded in the same timeframe the previous year.
For Asean nations, the export of rice amounted to $341 million from April to November 2023, which is a decrease from the $541 million recorded in the same period of 2022. It’s important to note that the South Asian countries mentioned earlier are not part of Asean.
The data indicates that despite the ban, rice exports are occurring through bilateral agreements to these countries, although it’s acknowledged that the prices may not be directly comparable.
“These exports are happening through government-to-government arrangements,” said a source. These transactions are facilitated by the National Cooperative Exports Ltd, a government export body established under the Multi-State Cooperative Societies (MSCS) Act, 2002. Its purpose is to export agricultural produce and related items.
However, leaders in the industry anticipate that the ban will help control the prices of essential food items and ensure a supply of rice for distribution to beneficiaries of the PM Garib Kalyan Anna Yojana free of charge for the next five years.
“The government is doing a praiseworthy job by keeping domestic prices in check and supplying food to neighboring countries,” remarked Rajnikant Rai, CEO of ITC’s agribusiness division.
In November 2023, rice exports to Iran, a significant neighboring country, surged to $60 million, a substantial increase from the $4.25 million recorded in October—an impressive growth of 1,314%. Similarly, the export of oil meals to the country witnessed a remarkable rise from $1.22 million in October 2023 to $46.52 million in November, marking a staggering growth of 3,713%, as indicated by the data.
In November 2023, the overall growth of rice exports to South Asian countries witnessed a remarkable surge of 478% compared to October, as per government data.
India sent rice to Bhutan amounting to $0.94 million in November, showing a 21% increase from the previous month’s $0.78 million.
The export of rice to Nepal reached $5.77 million in November, up from $3.64 million in October.
Among ASEAN nations, Vietnam experienced the highest growth in rice exports, with a notable increase of 171.43%, rising from $5.39 million in October to $14.63 million in November 2023. Additionally, Indonesia imported Indian rice worth $1.80 million in November, up from $1 million in the previous year.
Currently, the government has given the green light for the export of 2.77 million tonnes of non-basmati white rice to 14 significant nations in Asia and Africa, including Singapore, Nepal, Malaysia, and the Philippines.
Alongside white rice, India has permitted the export of 14,184 tonnes of wheat, 5,326 tonnes of atta, 15,226 tonnes of maida, and 48,804 tonnes of broken rice to Bhutan on November 30. On the same day, exports of broken rice were sanctioned to Mali (1 lakh tonne), Senegal (5 lakh tonne), Gambia (50,000 tonne), and Indonesia (2 lakh tonne).
To address rising food prices and inflationary pressures, the government took several measures. In May 2022, a ban was imposed on wheat and its derivatives like atta, suji (semolina), and maida. Subsequently, in September 2022, a ban was placed on the export of broken rice. In response to escalating food prices in July 2023, the government banned non-basmati white rice exports, implemented a 20% export duty on parboiled rice, and set a minimum export price (MEP) of $1,200 per tonne for basmati rice in August 2023.
The decision to ban rice exports became necessary due to a decrease in the public stock in the Central pool, leading to a sharp increase in the prices of essential cereals.
Surprisingly, after the ban, rice prices experienced a substantial surge in the global market. As a result, India’s strategic partners requested the food grain in installments. Subsequently, in October 2023, the Minimum Export Price (MEP) for Basmati rice was adjusted to $950 per tonne.
