Ban on broken rice exports likely to affect Telangana

By PS Dileep

The Centre’s decision to levy 20 percent duty on raw rice exports and ban export of broken rice has put paddy farmers and millers from Telangana in a tricky position. Though the Centre is claiming that the decision was taken to discourage rice exports and ensure availability of adequate stocks domestically, it is likely to have an adverse impact on farmers and millers, especially in Telangana, where a huge quantity of broken rice is expected during the Yasangi (Rabi) crop season.

Paddy is being cultivated in a record 55 lakh acres in Telangana during this Yasangi season, which expected to result in an yield of 1.5 crore tonnes. While the State government is planning to procure nearly 90 lakh tonnes, the Centre had agreed to purchase the rice but with a rider that the State would supply only raw rice. It is now well-known that the Yasangi crop would result in huge quantity of broken rice if the paddy is milled into raw rice.

India banned overseas shipments of broken rice and imposed a 20 percent duty on exports of various other grades in September 2022 amid concerns over production due to below-average monsoon rainfall in key paddy growing States. Though the Centre anticipated a shortfall of rice stocks in the country, the situation appears to be different.

The Union government has recently informed the Parliament that India’s rice exports recorded 22.26 million tonnes in 2022, an increase of 3.5 percent, making it the largest exporter of rice globally. Further, officials said India has ample stocks of rice domestically and would ensure that the restrictions have not deprived the world of rice.

The Centre’s decision not to lift the ban on broken rice exports is expected to affect buyers, particularly in China, who use broken rice as raw material for making ethanol or cattle feed. China was the largest buyer of India’s broken rice, with purchases of 1.1 million tonnes in 2021. Thus, this would affect Telangana farmers and millers adversely as well with the State turning into largest producer of broken rice due to the Centre’s mandate to supply only raw rice to the Food Corporation of India.

Meanwhile, a large quantity of parboiled rice which is used to make idli and dosa batter has been reportedly held up at some ports in Tamil Nadu and Andhra Pradesh, after the Customs authorities assuming it to be normal raw rice due to presence of chalky white grains in rice. The parboiled rice is largely exported to countries like Dubai, Japan, Singapore and Canada. The officials are asking the exporters to pay 20 percent duty to export it, treating it as raw rice. Except exports from Kerala, where idli rice is double parboiled, parboiled rice exports are affected in all other States.

This article has been republished from The Telengana Today