Rice exports may decline by a quarter in FY23 | The Financial Express

Rice exports may decline by a quarter in FY23

Of 17 mt of non-basmati rice exports last fiscal, broken rice had a share of 20%.

Rice exports may decline by a quarter in FY23
India accounts for around 40% of global rice trade and exports to more than 150 countries. (IE)

India’s rice exports in the current fiscal is expected to decline by 4-5 million tonne (mt) from a record 21 mt in 2021-22, due to the ban on shipment of broken rice and 20% exports tax on certain varieties of non-basmati rice.

According to V Krishna Rao, president, All India Rice Exporters Association, “Higher realisation from the exports tax imposed can’t compensate for the loss in volume of exports.”

Of 17 mt of non-basmati rice exports last fiscal, broken rice had a share of 20%.

Prior to the imposition of export duty, India was exporting non-basmati rice at around $ 360 a tonne, which would now be shipped at $430-440 a tonne, which is at par with prices offered by its competitors Vietnam and Thailand.

However, exports of high-value basmati rice are likely to be robust because of demand from countries such as Saudi Arabia, Iran and the UAE, according to Vijay Setia, a leading exporter.

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Meanwhile the US Department of Agriculture (USDA), in its rice outlook for September, has stated that India’s rice exports this year could decline by 2 mt compared to previous year.

India has been the world’s largest rice exporter in the last decade — export earnings stood at $ 8.8 billion in 2020-21 and $ 9.6 billion in 2021-22. In the current fiscal (April-July), $ 3.6 billion worth of rice (7.3 mt) has been exported.

India accounts for around 40% of global rice trade and exports to more than 150 countries.

Out of the 21 mt of rice shipment in 2021-22, India exported more than 17 mt of non-basmati rice and the rest of the volume was aromatic and long-grain basmati rice. In terms of volume, Bangladesh, China, Benin and Nepal are five major export destinations of rice.

The USDA has projected India’s rice production to decline to 126.5 mt in 2022-23, from a record output of 130.3 mt in 2021-22. The anticipated decline in production is because of deficiency in monsoon rains in key eastern states — Uttar Pradesh, West Bengal, Bihar and Jharkhand — which have severely impacted paddy sowing.

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Food secretary Sudhanshu Pandey last week stated that the rice production because of deficient rainfall in eastern states could decline by 6-10 mt.

According to the price monitoring cell of the Department of Consumer Affairs, the wholesale prices of rice has risen by more than 10% to Rs 3,3357/quintal on September 16 from Rs 3,047/quintal a year ago. Retail prices have risen by around 9% to Rs 38/kg during the same period.

Inflation in rice in August was 6.94% compared to a year ago.

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