The government may impose restrictions on exports of broken rice, which is used as feed as well as for human consumption. Sources said that the restriction in terms of imposing an export tax is being considered.

There has been a rise in domestic prices of broken rice by around Rs 3 per kg to Rs 25 a kg in the last couple months. Broken rice is mostly used as feed by the poultry industry as well as for production of ethanol. According to trade estimates, broken rice shipment has a share of around 20% in the total non-basmati rice export of 17 million tonne (MT) in 2021-22.

Broken rice is mostly exported to China, which uses it as livestock feed, while African countries such as Senegal import the grain for food.

“We prefer an export tax of 10-15% on broken rice shipment instead of imposing an outright ban,” V Krishna Rao, president, All India Rice Exporters Association, told FE.

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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.

According to the commerce ministry data, India’s value of rice exports rose 12% to $2.6 billion in the first quarter of the current fiscal compared to previous year. “We will sustain the momentum in rice exports in the current fiscal through shipment of quality rice,” M Angamuthu, chairman, Agricultural and Processed Food Products Export Development Authority (Apeda), had said.

In May, India had imposed strict curbs on export of wheat due to depleting domestic stocks. Meanwhile, the United States department of agriculture (USDA) in its rice outlook for August has stated that India’s rice exports are projected to increase to a record 22 MT in 2022-23 and account for 40% of global shipments despite a possible dip in domestic production during the period.

While stating that India has large supplies of exportable rice and very competitive prices, USDA has projected that country’s projected exports exceed the combined shipments of the next three-largest exporters — Thailand, Vietnam and Pakistan.

India’s rice production in the 2022-23 crop year could decline to 128.5 MT mainly because of deficiency in monsoon rains especially in the eastern regions, USDA has stated. It stated that ‘this is the first decline in India’s rice production since 2015-16’.

The USDA has projected India’s domestic rice consumption at 108.4 MT for 2022-23. India’s rice production rose to a record 130.29 MT in the 2021-22 crop year (July-June), an increase of close to 5% compared to previous crop year.

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.