India imposes 20pc export duty on parboiled rice

Staff Reporter :
The government of India has imposed a 20 percent duty on the export of parboiled rice, a move aimed at maintaining adequate local stock and keep domestic prices under check.

The export duty, imposed on August 25, will remain effective till October 16, 2023, reports Indian news agency Press Trust of India (PTI).

Experts said, for Bangladesh the new tariff imposed by India on parboiled rice will hurt immediately as the government is not considering importing rice at this time and we have ample stock.

But in the long run if India continues this export barrier, will negatively affect country’s rice market, they expressed.

Earlier in July this year, India surprised buyers by imposing a ban on exports of widely consumed non-basmati white rice, following a ban on broken rice exports last year.

The tariff by India will make parboiled rice expensive for foreign buyers, thereby limiting its overseas sales and boosting domestic availability.

Last month’s export ban on common grades of rice had quickened overseas shipments of the parboiled variety.

India exported 7.4 million tons of parboiled rice in 2022.

India accounts for more than 40 percent of world rice exports, and low inventories with other exporters mean any cut in shipments could inflate food prices already driven up by Russia’s invasion of Ukraine last year and by erratic weather.

Meanwhile, India is the leading source of Bangladesh’s rice imports.

Last year Bangladesh procured 71 percent of its imported rice from India, followed by Thailand 17 percent and Myanmar 12percent.

Rice imports require an import permit from the food ministry.

Usually the government imposes high tariffs of up to 62.5 percent to discourage rice imports after the Boro season rice harvest every year.

But when there is a shortage in supply or high prices of rice in the domestic market, the government reduces the tariff to 15 percent -25 percent and sometimes even lowers than that if required and gives approval for rice imports.

However, it is reported Bangladesh is likely to reduce the rice import tariff in next October and issue import permits to private importers.

Currently, rice stocks in the country’s public granaries are 1.74 million tons which up by 12 percent over the same period of the previous year.

Muhammad Mahbubur Rahman, senior assistant secretary (external procurement) at the Ministry of Food said that both rice production and government stocks are in a good position.

As a result, even if the price of rice increases in the international market, it will not have any sudden impact on Bangladesh.