India extends curbs on rice exports with 20% duty on parboiled variety

India has implemented a 20% export duty on parboiled rice, as confirmed by a notification from the finance ministry on Friday.

This action comes in the wake of an earlier prohibition on shipping non-basmati white rice and broken rice, which were respectively announced in September 2022 and the preceding month, a response to the surging prices of this dietary staple.

Although the finance ministry says that the export duty comes into force with immediate effect, the exporters who have contracted earlier (before the notification date) are allowed to export their consignments at zero duty until 15 October.

According to trade sources, the objective is to slow down or delay shipments.

By 15 October, the government will have a fair idea about expected rice production.

A report by Mint on 22 August initially disclosed the Indian government's contemplation of this 20% duty on exports of non-basmati parboiled rice.

The objective behind this move is to stabilize prices and bolster inventory within the domestic market, countering the persistent inflationary pressures that have been exacerbated by the escalating costs.

Firm prices of rice domestically have been a concern despite the government restricting exports of non-basmati white rice on 20 July, three days after Russia pulled out of the Black Sea grain deal.

Prices of parboiled rice have risen 19% since April in the domestic market and 26% in the international market, while the export quantity and value of the rice variety shot up 21% and more than 35%, respectively.

Currently, all-India average retail parboiled rice is available at ₹37-38 a kg and ₹92-93 for basmati rice.

Traders said that free-on-board (FoB) parboiled rice price is around $500 a tonne and $1,000 a tonne for basmati varieties. India has a share of around 25-30% of the global parboiled rice trade.

Retail inflation in rice rose to 12.96% in July from 12% in June and 4.3% in July 2022.