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Informist, Friday, Aug 9, 2024

 

By Taniva Singha Roy

 

MUMBAI – The government may waive the 20% export duty on non-basmati parboiled rice in view of ample availability of the cereal in the country, an official told Informist. Export restrictions on non-basmati rice are likely to be eased as domestic prices are under control, the official said.

 

The official said the government is waiting for the right time to make the decision, probably after the forthcoming state assembly elections. The Directorate General of Foreign Trade will issue a notification once the decision is made.

 

"Trade cannot be halted for a long time and there will be a reversal of the government's decision to impose restrictions on exports of a few commodities, like non-basmati rice," said another official from the Plant Quarantine Department under the Ministry of Agriculture and Farmers Welfare, responsible for the export and import of farm produce.

 

The government in August 2023 imposed 20% duty on the export of parboiled rice, a move aimed at maintaining adequate local stock and keeping domestic prices in check. The duty was to be levied till Mar 31, but in February the government said it would continue until further notice.

 

However, with rice stocks with the Food Corp of India rising to record levels, the case for continuing to levy the export duty has weakened, experts say. Data released today show that stocks with the FCI as of Aug 1 were the highest since 2005 at 32.8 mln tn. Rice stocks have risen nearly 35% on year and are up slightly from 32.6 mln tn a month ago, the data show, far above the Jul-Sep buffer norm of 13.5 mln tn--operational stock of 11.5 mln tn and strategic reserve of 2 mln tn. Total paddy stocks with the government as of Aug 1 were 51.7 mln tn, of which 32.7 mln tn was rice and 19.0 mln tn was unmilled paddy.

 

This year, the area under paddy, one of the main kharif crops, is up 5.3% on year at 27.7 mln ha as of Aug 2.

 

Experts believe the ban on rice exports will only be in force till the end of August or September. The government's priority is the country's food security and curbing inflation, after which it can think of allowing exports, said G. Chandrashekhar, commodity market expert and policy commentator.

 

The surplus rice production and higher paddy acreage in the current kharif season also mean the government has to free up storage space before the new procurement season starts in October. Accordingly, the government has allowed states to procure rice directly from the FCI. The price of rice has also started falling on account of increased availability. The all-India average wholesale price of rice was 3,896.71 rupees per 100 kg on Thursday, down 53 rupees from 3,949.55 rupees per 100 kg a month ago, according to the consumer affairs department.

 

The India Meteorological Department, in its forecast for Aug-Sep, said weak La Nina conditions are likely to set in over the country by the end of August and last till the end of the year. La Nina brings good rainfall to India, which may further boost output of rice, essentially a rainfed crop.

 

Market participants expected the government to relax the export duty on rice before the Union Budget for 2024-25 (Apr-Mar) was presented on Jul 23, and to cut the floor price for basmati rice exports as well, given the glut of the staple grain in the domestic market. Currently, basmati rice can be exported only at a minimum price of $950 per tn.  End

 

Edited by Rajeev Pai

 

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