India’s Strategic Move: Imposing a 20% Export Duty on Parboiled Rice

The Indian government’s decision to impose a 20% export duty on parboiled rice has significant implications for both domestic and global rice markets. This export duty, effective from August 25, 2023, is primarily aimed at maintaining adequate local stock and controlling domestic prices. It was initially set to expire on October 16, 2023, but has been extended till the end of March 2024​​​​​​.

In 2022, India exported 7.4 million tons of parboiled rice, accounting for over 40% of the world’s rice exports. The recent duty is expected to reduce India’s rice shipments, potentially elevating global rice prices, which are already near their 12-year high. This follows India’s prior actions, such as banning exports of non-basmati white rice and broken rice, which had driven buyers to increase purchases of parboiled rice, thus raising its prices. The duty aligns Indian parboiled rice prices with those from other major suppliers like Thailand and Pakistan, limiting the options for global buyers​​.

Furthermore, India has now imposed restrictions on all types of non-basmati rice, a staple for many consumers in Africa and Asia. These actions are part of the Indian government’s broader strategy to control food inflation, particularly in light of the upcoming general elections. This strategy also includes extending a ban on wheat exports and capping sugar exports due to reduced cane yields​​.

In summary, the Indian government’s 20% export duty on parboiled rice is a strategic move to ensure domestic supply and price stability. However, it also affects the global rice market dynamics, potentially leading to higher prices and limited options for rice importers worldwide.



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