India plans to ease rice export curbs as stocks surge to record, sources say
India is likely to cut the floor price for basmati rice exports and replace the 20% export tax on parboiled rice with a fixed duty on overseas shipments, government sources said, as rice inventories in the country jumped a record high.
This came after the world’s largest rice exporter imposed various curbs in 2023 and 2024 in an attempt to reduce domestic prices ahead of the general elections held in April-May. As well as rising concerns of lower output due to El Nino weather pattern.
New Delhi is expected to lower the basmati rice’s minimum export price (MEP) to $800-$850 a metric ton, down from $950 a ton, to boost shipments, according to a report by Reuters. The move is expected to help India retain its market against Pakistan which saw a record export due to India’s export curbs.
India exports more than 4 million metric tons of basmati to countries such as Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates and the United States.
The export tax is expected to drop the 20% on parboiled rice and minimum export tax is to be introduced to stop under-invoicing of shipments. The government was examining possibilities of easing rice export curb, including resuming white rice exports, Reuters reported last month. Reviews on the export ban on non-basmati white rice after assessing the progress of rice planting are also under consideration.
“With rice supplies significantly exceeding local demand, it’s crucial to reduce stockpiles to prevent spoilage. The most effective solution is to lift export restrictions,” said B.V. Krishna Rao, president of the Rice Exporters Association (REA).
The country’s rice stocks at state warehouses have jumped to 48.51 million metric tons as of July 1, the highest ever for the month and nearly 19% more than last year, as farmers have planted 11.6 million hectares with rice paddy during the current season, an up 20.7% on the same period last year according to the Food Corporation of India.
This article has been republished from The New Indian Express.