India's broken rice exports had gained over 90% in FY22, shows data

The government’s ban on broken rice exports and restrictions on other grades of the cereal comes amid export gains that were at a multi-year high, shows a Business Standard analysis of trade data.

While India’s exports of broken rice jumped 90.2 per cent to $1.1 billion in the financial year 2021-22 (FY22), they had been $595.7 million in FY21. The share of broken rice in overall rice exports had risen from 6.7 per cent in FY21 to 11.7 per cent in FY22 (chart 1).

India exports rice to at least 164 countries. Iran was the biggest destination in FY22, accounting for $855.7 million of India’s rice exports. This was followed by Saudi Arabia ($715.3 million), Bangladesh ($ 620 million), Benin ($533.1 million), and China ($497.6 million) (chart 2).

China is the biggest recipient of India’s broken rice exports. Exports to the country netted $480.3 million in FY22. This is followed by Senegal ($253.5 million) and Vietnam ($97.3 million).

“The central government, in exercise of powers conferred... hereby amends the export policy of broken rice,” said the notification dated September 8 and effective from the next day which prohibited the export of broken rice.

Some exceptions were allowed, including for shipments which were under process.

“During the period from September 9 till September 15, the following consignments of broken rice will be allowed...where loading of broken rice on the ship has commenced before this notification...where the shipping bill is filed and vessels have already berthed or arrived and anchored in Indian ports...and where broken rice consignment has been handed over to the Customs before this notification and is registered in their system,” it said.

The government is said to have acted because sowing has not been up to expectations on account of rainfall irregularities. The move is expected to increase global prices as India is a major source of the cereal.

Prices have been benign in the recent past with limited change in August compared to July, according to the United Nations’ Food and Agriculture Organization (FAO) in its September 2022 FAO Rice Price Update. The FAO All Rice Price Index was at 108.5 points in August, similar to July levels, though 10.9 per cent higher than August 2021 when prices had hit a 50-month low. It had noted the problem of uneven rainfall though there was some optimism at the time.

“In India, where kharif plantings made considerable inroads in narrowing lags caused by uneven rains during the month, the tendency for prices to strengthen was confined to the parboiled segment. In this market, prices drew support from signs of an intensification of purchases by Bangladesh, as officials in that country attempted to revive imports hitherto limited by the weakness of the taka,” it said.