In a significant development, India has taken measures to address the consequences of its sudden ban on the export of non-basmati white rice by permitting traders to ship out their stranded rice cargoes from various ports. The move comes as a response to the challenges posed by the unexpected ban on this widely consumed rice variety, as confirmed by a government order issued late on Tuesday.
The ban, imposed on July 20, aimed at controlling the surging domestic prices of non-basmati white rice, left many traders and exporters grappling with significant losses. Furthermore, the ban had resulted in the accumulation of substantial quantities of this rice category at different ports.
The Directorate General of Foreign Trade (DGFT), a division of the trade ministry, has now intervened with a solution. According to the latest DGFT order, shipments of the trapped non-basmati white rice cargoes will be permitted, provided that traders fulfill the requirement of paying the export duty by the initial ban date of July 20.
Before the ban, exports of non-basmati white rice attracted a 20% tax. With the issuance of the DGFT order, approximately 150,000 tonnes of these rice cargoes, which were previously held at various ports, are now set to be released for shipment, as reported by Prem Garg, the President of the Indian Rice Exporters Federation. Garg emphasized that this decision is poised to alleviate significant challenges faced by the rice industry.
“Three ships were standing still at the Kandla port and a lot of containers were lying at different ports, causing a lot of problems for the rice industry,” Garg explained, underscoring the practical implications of the export ban on the industry’s operations.
India, a global leader in rice exports accounting for 40% of worldwide rice trade, supplies this staple food item to more than 150 countries, including economically vulnerable nations in Africa and Asia. Notably, the country exported a record-breaking 22.2 million tons of rice in the year 2022.
This move to ease the export ban on non-basmati white rice comes on the heels of India’s decision to implement a 20% tax on parboiled rice exports and introduce a minimum price for basmati rice sales abroad, all aimed at mitigating domestic price pressures.
The impact of India’s rice export restrictions has reverberated globally, resulting in an upward push in global rice prices. Prem Garg highlighted that beyond benefiting Indian suppliers, the permission to release the stranded cargoes from ports will also provide relief to consumers in neediest countries.
Most of the released rice cargoes are anticipated to find their way to East African and West African countries, serving as a lifeline to these nations facing food security concerns.
The decision to release trapped non-basmati white rice cargoes stands as a noteworthy step to address the fallout of the export ban while fostering international trade ties and ensuring global food security.