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Food ministry says deficit rains may hit rice production, banks on export curbs to tame prices

New Delhi: The production of rice could see a sharp drop of 10-12 million tonnes in the 2022-23 Kharif crop season following deficit rains in at least four states and crop diversification in some, the food ministry said Friday.

The estimated 10 per cent hit to production is one reason why the government put restrictions on exports of rice.

On Thursday evening, India imposed an export duty of 20 per cent on all varieties of rice except basmati and parboiled rice. It also prohibited export of broken rice which is domestically used for manufacturing ethanol and for animal feed.

In 2021-22, India exported over 21 million tonnes of rice, of which basmati and parboiled rice contributed 11.4 million tonnes. The export restrictions means a 10 million tonnes hit to global supplies.

India is the world’s largest rice exporter, accounting for a 40 per cent share in the global rice trade of around 50 million tonnes.

Export of parboiled rice will continue for dependent and vulnerable countries, food secretary Sudhanshu Pandey said Friday, adding, export of premium basmati rice which is consumed by the Indian diaspora will continue.

The food secretary said the 20 per cent export duty will lead to a softening of retail rice prices while the ban on export of broken rice will result in higher availability for ethanol manufactures and cattle feed users in India.

“The export curbs on rice will increase domestic availability and allow the government to continue with the free foodgrain scheme [Pradhan Mantri Garib Kalyan Anna Yojana] beyond September and ahead of crucial state elections [in Gujarat and Himachal Pradesh],” said a Delhi-based grain trader. “It will also prevent rerouting of free foodgrains [under the scheme] for exports which has been happening in the past two years.”

On the domestic rice production scenario, the food ministry said that due to a drought in West Bengal, Bihar, Jharkhand and Uttar Pradesh — which led to lower rice planting —  and  diversification in other states, the area under rice cultivation is lower by 3.8 million hectares.

The loss in rice production could be between 10-12 million tonnes but it would not lead to any shortage, it said.

However, in a statement released Friday evening, the ministry revised downwards the estimated loss in rice production to 6-7 million tonnes or an even lower 4-5 million tonnes.

ThePrint had earlier reported that uneven rains could put 15 million tonnes of rice production at risk.

The export curbs on rice follows India prohibiting wheat exports in May after a heat wave led to a lower harvest. Data from the consumer affairs department show that, as on 9 September, retail prices of rice and wheat shot up by 8.5 per cent and 19 per cent, respectively, year-on-year.

Similarly, data shared by the food ministry show that maize price rose from Rs 19 per kg in early 2022 to Rs 24 per kg in early September. The price of broken rice also increased by 27 per cent during this period.

Since both these grains are used to produce animal feed, the ministry is hoping a ban on broken rice exports will ensure lower feed prices.

“The export restrictions will lead to a 20 per cent drop in global rice supplies. By not restricting exports of parboiled rice, India seeks to protect the food security of several least developed countries,” said S Chandrasekaran, a Delhi-based trade analyst.

Bangladesh, and Benin and Ivory Coast in West Africa are the leading importers of parboiled rice from India.

In comparison, China is the leading importer of broken rice (used as animal feed), accounting for 1.6 million tonnes out of total exports of 3.9 million tonnes from India in 2021-22.

Source: The Print

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