India is devising innovative strategies to tackle the persistent challenge of food inflation, particularly concerning rice prices. Despite a marginal downturn in overall food inflation for March, the cost of rice remains alarmingly high, with a staggering 12.7% surge compared to the previous year. In response, the government is contemplating a significant shift in its approach: reducing the proportion of broken rice utilized in non-basmati rice exports from the existing 25% to a mere 5%. This strategic move is aimed at fortifying domestic rice reserves amidst the relentless surge in prices, as highlighted by a senior government official.
Despite the implementation of several measures, including the introduction of Bharat rice, disclosure of stocks, and export limitations, retail prices persist in their upward trajectory, reaching ₹44.40 per kilogram—an unsettling 13.10% increase year-on-year, as per data from the consumer affairs ministry.
Presently, the Directorate General of Foreign Trade (DGFT) stipulates a broken rice percentage of 15% for parboiled rice. However, the Department of Food and Public Distribution (DFPD) is advocating for a reduction to 5% in export consignments, with the aim of enhancing quality standards and potentially alleviating domestic price pressures.
Similarly, for non-basmati white rice, which currently carries a 25% broken percentage requirement, there’s a proposal to slash it to 5% for export consignments. However, it’s noteworthy that the acceptable broken percentage varies based on the preferences of the importing countries. For instance, while African nations may accept non-basmati white rice with a 25% broken percentage, the stringent demand from the US calls for a much lower range of 2-3%.
This prospective reduction in broken percentage for exports isn’t merely about stabilizing domestic prices but also aims to ensure a steady supply of broken rice for various industrial applications, including ethanol production. However, there are apprehensions regarding its potential impact on overall rice exports. Consequently, the Department of Commerce has been entrusted with the responsibility of conducting a comprehensive assessment before any definitive decision is made.
Currently, exports of non-basmati white rice are restricted and permissible only on a government-to-government basis, while parboiled rice exports incur a 20% duty. Should this proposal be greenlit, the new specifications will be applicable to future exports of non-basmati white rice under the government-to-government arrangement. To date, India has exported approximately 2 million tonnes of non-basmati white rice via this channel since imposing export restrictions last July.