Enabling clause. G2G demand for broken rice mostly from African nations, say officials

The Directorate General of Foreign Trade (DGFT) put an enabling clause last month in its prohibition order for export of broken rice allowing exports on government to government (G2G) basis in order to meet requests from some African nations, official sources have said.

‘There is only limited G2G demand for broken rice. It is mostly from African nations. When the DGFT came up with prohibition order on export of broken rice, the government had thought that there would be no demand from governments as there are sources other than India. But then the situation changed,’ an official tracking the matter told businessline.

According to a notification issued by the DGFT on May 22, while the export policy of broken rice is prohibited, exports will be allowed on the basis of permission granted by the government to other countries to meet their food security needs and based on the request of their government.

‘If you look at our previous export ban notifications for wheat and wheat flour banning, we kept a provision like this allowing exports on a G2G basis in the original notification itself. In the case of notification on export ban on broken rice, such a provision was not there. Hence, an amendment had to be done when requests for exports started coming in,’ the official said.

The requests for exports have come in for small quantities which will not affect India’s domestic stocks or food grain availability, the official said.

‘It is mostly African countries that put in requests for broken rice, at least till recently. The exports on a G2G basis are unlikely to make a any significant dent in India’s food grain stocks,’ the official said.

Export ban impact

The Centre placed a ban on export of broken rice in September 2022 due to an increase in its price, a shortage in supply for domestic requirements, and a steep increase in exports.

India’s exports of broken rice fell 13.9 per cent in 2022-23 to $983.5 million from $1.13 billion the previous fiscal. Exports got heavily curbed after the export ban.

India’s wheat and rice stock in the Central Pool is comfortable at over 57.9 million tonnes (mt) and the country can meet its foodgrain requirements, the Food Ministry said in a statement earlier this month.

This article has been republished from The Hindu Business Line

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