Ministry Of Commerce & Industry Implements Stricter Measures To Prevent Misclassification Of Rice Exports
Bhavya Singh
28 Aug 2023 10:30 AM GMT
In an effort to curb the misclassification of rice exports and ensure transparency in the international trade of rice, the Ministry of Commerce & Industry has introduced additional safeguards for the export of Basmati rice. The move comes as part of the government's ongoing efforts to check domestic prices and secure food supplies within the country. The announcement comes after...
In an effort to curb the misclassification of rice exports and ensure transparency in the international trade of rice, the Ministry of Commerce & Industry has introduced additional safeguards for the export of Basmati rice. The move comes as part of the government's ongoing efforts to check domestic prices and secure food supplies within the country. The announcement comes after the prohibition of non-Basmati white rice exports on July 20, 2023.
Recent data indicates that rice exports have continued to surge, despite certain varieties facing export restrictions. As of August 17, 2023, the total exports of rice, excluding broken rice which is prohibited, have reached 7.33 million metric tons (MMT), marking a significant increase of 15.06% compared to the same period in the previous year when it stood at 6.37 MMT.
Of particular note is the substantial rise in the exports of parboiled rice and Basmati rice, both of which were unrestricted. Parboiled rice exports have grown by 21.18%, reaching 3.29 MMT during the current year compared to 2.72 MMT during the previous year. Similarly, Basmati rice exports have risen by 9.35%, reaching 1.86 MMT in the current year compared to 1.70 MMT in the previous year.
Despite the imposition of an export duty of 20% since September 9, 2022, and the subsequent prohibition on July 20, 2023, exports of non-Basmati white rice have shown an increase of 4.36%, totaling 1.97 MMT as opposed to 1.89 MMT in the previous year. This is particularly concerning given that the third Advanced Estimate of the Department of Agriculture & Farmers Welfare has reported a decline of 13.84% in rice production during the Rabi Season 2022-23.
Globally, strong demand from Asian buyers, production disruptions in key producing nations such as Thailand, and concerns over the potential impacts of El Nino have led to a continuous rise in international rice prices.
The FAO Rice Price Index reached its highest value since September 2011, standing at 129.7 points in July 2023, reflecting a 19.7% increase over the previous year. Despite this, Indian rice remains competitively priced compared to international markets, driving substantial demand for Indian rice and contributing to record exports during the past two years.
To address the issue of misclassification and illegal exports of non-Basmati white rice, the government has taken action. The Agricultural & Processed Food Products Export Development Authority (APEDA), which oversees the export of Basmati rice, has been directed to implement additional measures. These include:
1. Registration Requirement: Contracts for Basmati rice exports valued at USD 1200 per metric ton or more must be registered to receive a Registration – cum – Allocation Certificate (RCAC).
2. Evaluation Committee: Contracts with values below USD 1200 per metric ton will be temporarily put on hold and evaluated by a committee to be established by the Chairman of APEDA. The committee will scrutinize the pricing variations and assess the potential use of this route for non-Basmati white rice exports. A report is expected to be submitted within one month, enabling informed decisions regarding lower-priced Basmati rice exports.
3. Consultations with Trade: APEDA will engage in consultations with trade partners to raise awareness about the issue and collaborate to discourage any misuse of this export avenue for non-Basmati white rice.
