Content ID

333434

UPDATE 2-India curbed rice exports after rise in shipments lifts local prices

(Adds details)

By Mayank Bhardwaj and Rajendra Jadhav

NEW DELHI/MUMBAI, Sept 9 (Reuters) - India restricted rice exports after shipments jumped sharply in the past few months and amid concerns over the new season crop because of below-average rainfall in four key producing states, a top government official said on Friday.

India banned exports of broken rice and imposed a 20% duty on exports of various grades of rice on Thursday as the world's biggest exporter of the grain tries to augment supplies and calm local prices after below-average monsoon rains hit planting.

Broken rice prices jumped 38% so far in 2022 as exports during April-August rose to 2.13 million tonnes from 1.58 million tonnes a year ago, Sudhanshu Pandey, the most senior civil servant at the Ministry of Consumer Affairs, Food and Public Distribution, told reporters.

"There was exponential increase in broken rice exports in the past four years," Pandey said.

Broken rice wasn't available for poultry feed or for ethanol production as the share of broken rice in total exports jumped to 23% in 2022 from just 1.3% in 2019, he said.

A rally in corn prices prompted feed makers, especially in China, to substitute corn with broken rice in the past few months. A few African countries import broken rice from India for human consumption.

Below-average rainfall in key rice-producing states such as Bihar, Uttar Pradesh and Jharkhand has raised concerns over India's rice production.

After a weak start in June, when monsoon rains were 8% below average, summer rains picked up in July and August, cloaking 16.8% and 3.4% above average, respectively.

India's overall monsoon rains so far in the season that began on June 1 are 5% above average. Still, rains over Bihar, Uttar Pradesh and Jharkhand were patchy, with rainfall deficit as high as around 45%.

India's weather office defines average, or normal, rainfall as between 96% and 104% of a 50-year average of 89 cm (34 inches) for the season.

The country's rice production could fall by as much as 12 million tonnes in the worst-case scenario, said Pandey, adding "Yields could be lower in some areas due to lower rains but in terms of overall availability and supplies, we do not have any problem at all."

Last year, India's summer-sown rice output, which accounts for more than 80% of the country's total production, was 111.8 million tonnes.

India's rice exports in the first eight months of 2022 rose to 15.25 million tonnes from 14.5 million tonnes a year ago.

The area under India's summer-sown rice dropped by 3.8 million hectares this year, Pandey said.

After India's decision to curb rice exports shares in Indian rice exporters such as LT Foods, GRM Overseas , Chaman Lal Setia Exports, Kohinoor Foods and KRBL fell up to 5% on Friday.

India in May banned wheat exports after overseas shipments surged due to a rally in global prices, triggered by Russia's invasion of Ukraine - the two key wheat suppliers.

Unlike wheat, rice was so far not impacted by any major shortfall in supplies or the war in the Black Sea region. (Reporting by Mayank Bhardwaj and Rajendra Jadhav; Editing by Kim Coghill, Elaine Hardcastle and Louise Heavens)

© Copyright Thomson Reuters 2022. Click For Restrictions - http://about.reuters.com/fulllegal.asp

Read more about
Loading...

Talk in Marketing