Central Idea

The Indian government takes measures to stabilize domestic rice prices and ensure food security.
Recent actions include banning white rice exports, imposing a 20% export duty on par-boiled rice, and allowing Basmati rice exports under specific conditions.

Rice Production Estimate: Shows decline

Third Advanced Estimate shows a 13.8% decline in Rabi season 2022-2023’s rice production.
Kharif sowing data indicates increased rice cultivation, but delayed sowing predicted due to monsoon issues.
Expectations of new season crop arrivals starting after the first week of September.

India holds a 45% share in the global rice market and leads in exports.
April-May 2023 rice exports show a 21.1% increase compared to the previous fiscal year.
May records a 10.86% rise in Basmati rice exports and 7.5% increase in non-Basmati rice exports.
Non-Basmati rice shipments have been rising for three years, and Basmati exports in 2022-2023 exceed the previous year.
Total rice exports (excluding broken rice) till August 17 are 15% higher than the same period last year.

Increased Minimum Support Price (MSP) for rice benefits farmers.
Current paddy procurement prices by rice millers are higher than MSP, ensuring better returns.
Export restrictions prevent steep rice price increases in the domestic market.
The government’s high benchmark price strategy benefits farmers, ensures availability, and avoids price spikes.

Competitive prices of Indian par-boiled rice globally, despite the 20% export duty.
Some rice-exporting countries, like Indonesia, now seek imports due to market dynamics.
Calls for classifying rice based on type (common vs. specialty) instead of Basmati and non-Basmati.
Suggestion to insulate Geographical Indication (GI) recognized rice from general market interventions.
Concerns about the impact of export restrictions on farmers and calls for policy adjustments.

India’s efforts to balance domestic and international rice markets involve export restrictions and price management.
Rice exports remain competitive even with export duty, driven by global demand.
Export policies and decisions need to be aligned with market dynamics to benefit farmers and the economy.