Labourers unload rice bags from a supply truck at India's main rice port at Kakinada Anchorage in the southern state of Andhra Pradesh, India, September 2, 2021. REUTERS/Rajendra Jadhav
By Pratik Parija, Shruti Srivastava and Siddhartha Singh
(Bloomberg) –India imposed more curbs on shipments of rice to ensure its food security, a move by the top exporter that’s likely to further squeeze global supplies of the grain.
The government levied a 20% export tax on parboiled rice with immediate effect, according to a notification by the finance ministry late Friday, confirming an earlier report by Bloomberg News. India has now restricted overseas sales of all non-basmati varieties, which account for about 80% of its total rice shipments. Its share in the global rice trade is about 40%.
Asian rice prices soared to their highest in almost 15 years earlier this month, and could climb further, raising costs for importers such as the Philippines and some African nations. India’s recent protectionist measures are in line with its aggressive efforts to cool local food prices ahead of a general election early next year, when Prime Minister Narendra Modi will seek a third term.
“With this move, domestic prices will drop and that will help the government in controlling food inflation,” said B.V. Krishna Rao, president of the Rice Exporters Association. “But, global prices will rise and buyers will have to absorb the increase. There will also be re-negotiations between buyers and sellers on some contracts.”
Rice is a food staple for about half of the world’s population. India’s curbs come at a time when food costs are still elevated because of Russia’s war in Ukraine and as volatile weather across the world threaten supplies of grains and oilseeds. There are concerns India’s move to ensure domestic food security will hit several poorer nations still struggling to recover from the Covid-led economic downturns.
Read Also: Heat, War And Export Bans: Global Food Threats Are On the Rise
Parboiled rice accounts for about one-third of India’s total rice shipments. The nation has already banned exports of broken rice and non-basmati white rice, curbed shipments of wheat and sugar, and restricted stockpiling of some crops. India is also considering abolishing a 40% import levy on wheat, and selling tomatoes, onions and grains from state reserves to improve local supplies.
Parboiling is a process that involves partial boiling of the paddy before milling to boost its nutritional values and change the texture of cooked rice. Some restaurants use parboiled rice because it is already clean and easy to cook.
The government said that exporters having valid letters of credit before the new rule will still be allowed to ship the grain. The export tax on parboiled rice will remain in force until Oct. 15, it said.
© 2023 Bloomberg L.P.Share
Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 109,835 members that receive our newsletter.
Have a news tip? Let us know.
The EU’s 15th sanctions package against Russia for the first time targets Yamal LNG by including a carrier in service of the project. The ice-capable tanker Christophe de Margerie, one...
Twelve European countries are set to clamp down on tankers that move millions of barrels of Russian petroleum around the world — by asking to see how they’re protected against oil spills and other high-cost claims.
The European Union has unveiled its 15th package of restrictive measures, specifically targeting Putin’s shadow fleet and maritime circumvention efforts. The latest sanctions package introduces port access bans and service...
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
Sign Up
Maritime and offshore news trusted by our 109,835 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up
Join The Club
