India may relax rice export restrictions to prevent domestic oversupply - Hindustan Times

India may relax rice export restrictions to prevent domestic oversupply

Bloomberg |
Jul 08, 2024 09:41 PM IST

India may relax restrictions on exports of some varieties of rice with a fixed duty to avoid oversupply in the country before the October harvest.

India, the world’s top rice shipper, may relax restrictions on exports of some varieties to avoid a glut in the country before the new crop arrives in the market in October, according to people familiar with the matter.

India is the world's largest exporter of rice (Unsplash)
India is the world's largest exporter of rice (Unsplash)

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The government is considering allowing white rice shipments with a fixed duty, said the people, who asked not to be identified as the talks are confidential. The authorities may also scrap a 20% tax on parboiled rice exports and impose a fixed levy instead to discourage under-invoicing of cargoes, they said.

What would be the global implications if India exports more rice?

Any such move could help cool benchmark Asian rice prices, which reached the highest in more than 15 years in January, following India’s move to start restricting sales of key varieties from 2023. That would be good news for some countries in West Africa and the Middle East that rely on the South Asian nation for most of their requirements of the food staple.

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A spokesperson representing both the food and commerce ministries didn’t immediately comment.

How was India's rice exports previously?

India’s total rice exports slumped 21% from a year earlier to 2.9 million tons in the first two months of the fiscal year that started on April 1, according to government data. Shipments of non-basmati rice fell 32% to 1.93 million tons during the same period, it said.

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Indian farmers are in the midst of sowing their main rice crop for the next harvest as the monsoon kicks off. Planting will peak in July and the grain will be collected from late September.

Acreage stood at 6 million hectares (14.8 million acres) as of July 8, a jump of 19% from a year earlier, according to the farm ministry, following a recovery in the monsoon after deficient rains last month.

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