NEW DELHI, September 28, 2024 – In a significant policy shift aimed at bolstering its position in the global market, India, the world’s largest rice exporter, has announced the lifting of its ban on the export of non-basmati white rice. The decision, effective immediately, was made public early Saturday, setting a minimum export price (MEP) at $490 per tonne to ensure domestic availability while capitalizing on high international demand.
This move comes after a prohibition that was initially imposed in July 2023 to curb rising domestic prices and enhance local supply amidst concerns over food inflation. However, with rice inventories now swelling due to bumper harvests and the upcoming harvest season, the government has deemed it appropriate to re-allow these exports.
“The export policy for non-basmati white rice is amended from prohibited to free, subject to MEP of USD 490 per tonne with immediate effect and until further orders.” – Director General of Foreign Trade
The Directorate General of Foreign Trade (DGFT) issued a notification stating, “The export policy for non-basmati white rice is amended from prohibited to free, subject to MEP of USD 490 per tonne with immediate effect and until further orders.” This adjustment in policy reflects India’s confidence in its current stock levels and its strategy to manage food inflation, which has cooled to a nearly five-year low.
The lifting of the export ban is expected to have a considerable impact on global rice markets. India accounts for more than 40% of global rice shipments, and the re-entry of its non-basmati white rice could stabilize or even lower international rice prices, which have been volatile due to various trade restrictions and weather-related issues in other rice-producing nations.
Economists and trade analysts view this as a strategic move not only to manage domestic stocks but also to assert India’s dominance in the rice market, particularly at a time when other major exporters face climatic or economic challenges. Additionally, the government has reduced the export duty on parboiled rice to 10% from the previous 20%, signaling a broader easing of rice export restrictions.
This reduction and the exemption of non-basmati white rice from export duty, effective from September 27, underline a policy shift aimed at enhancing farmer income and encouraging agricultural exports. The agricultural community and exporters have welcomed the decision, calling it a ‘game-changer’ that could lead to better price realization for farmers and a boost in foreign exchange earnings for the country.
However, the government’s decision also includes measures to safeguard domestic needs, ensuring that the export does not lead to a shortage back home. The minimum export price mechanism is designed to keep domestic prices in check while allowing for competitive pricing on the international stage.
As the global community watches, India’s policy reversal on rice exports might just set the tone for agricultural trade policies worldwide, balancing between domestic food security and international trade commitments.
