To maintain market stability, the Indian government has extended the 20 percent export duty on parboiled rice until March 31, 2024. This decision is a precautionary measure, as the previous duty expires on October 15, 2023. Traders and experts suggest that this extension is driven by the need to curb domestic rice prices, particularly amidst state elections scheduled for the following month.
This export duty was introduced immediately in August of this year to counter the sudden surge in rice shipments. One month before this decision, a ban was imposed on the export of non-basmati white rice, further emphasizing the government’s intent to regulate rice exports. Furthermore, the prohibition on exporting broken rice continues to be in effect. A recent notification from the Ministry of Finance, released late on a Friday night, solidified the extension of the export duty until March 31, 2024. The government’s timing is noteworthy, as it aligns with the customary release of Kharif crop output estimates, typically announced in the third or fourth week of September.
Experts have observed that although the overall paddy acreage during the current Kharif season is slightly higher than the previous year, crop yields in many regions are anticipated to be lower due to severe rainfall deficits in August and flooding in Haryana and Punjab. A Haryana government official noted a reduction in non-basmati acreage while observing an increase in Basmati rice cultivation, resulting in an overall expansion of paddy coverage.
Extending export duty on parboiled rice serves as a strategic measure to navigate the unpredictable landscape of rice production, guaranteeing market stability in the face of fluctuating crop yields and the dynamics of state politics.