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Export of rice from India curbed


So what was feared has come true. India banned the export of broken rice and imposed a 20% duty on the export of all Non-Basmati Rice on 10th September.


In my previous article, I expressed my apprehension that these curbs are coming and it's a reality now. The inevitable has happened and these curbs are likely going to be further stringent with every passing day till the next season which starts in September 2023.


Can these curbs spill over to Basmati rice? Absolutely. And the reasons are listed below:

  • Due to bad weather conditions in India which ranged from no rain to flooding in some places have reduced the area under rice plantation by 15%. Hence the shortage of rice is inevitable and the Government is quite nervous about that.

  • Due to the Russia-Ukraine conflict, the wheat export from these countries was already adversely affected which led to an increased demand for wheat from around the world. The Indian Government mismanaged the situation and permitted increased exports till they realised its wheat reserves had gone too low. The prices started increasing and the Government ended up banning wheat and wheat flour. This shortage and increased prices of wheat along with bad weather resulted in increased pressure on rice. This has led to low rice reserves in India.

  • Even though the consumers of Non-Basmati rice consume it as it is cheaper compared to Basmati, there are many who are on the borderline in terms of affordability and are most likely to shift to Basmati consumption. This is going to put additional pressure on Basmati.

  • India exports 40% of the rice that the world consumes. Hence there is a fit case for increased Basmati demand and prices in the coming days. We need to keep our fingers crossed to see if this increased demand will translate into an export ban on Basmati too.


What should you do?

As always, my suggestions would be:

  • Don't panic.

  • Don't overstock and always follow the FIFO principle to avoid infestations.

  • Please work with your suppliers closely and forecast your demand as best as possible so that they can plan their stock movement in the best possible ways.

  • This is not the time for trials. So rely on your trusted business partners and seek their advice as to how market behaviour is changing and the best course of action.

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