Basmati is a type of rice known for its low stickiness and long grains. On Saturday, the Indian government removed tariffs on non-basmati white rice exports and set a minimum export price of $490 per ton.
This move is seen as part of the Indian government's efforts to ease rice export restrictions. On Friday, the government lowered the export tariff on parboiled rice from 20 percent to 10 percent. In early September, it removed the floor price for basmati rice exports.
Sources indicate that the background for this lies in the sharp increase in domestic rice stocks. Last year, the Indian government implemented various rice export restrictions amid concerns about poor crop yields following forecasts that the El Nino phenomenon would reduce monsoon rains compared to the average.
However, this year’s heavy rains allowed farmers to expand the area for rice cultivation, leading to an oversupply. As of Tuesday, India’s rice stock stood at 32.3 million tons, up 38.6 percent from a year earlier, according to the Food Corporation of India.
With India easing rice export restrictions, the likelihood of a decline in global rice prices has increased. In 2022, India's rice exports totaled 22.2 million tons, accounting for more than 40 percent of the world's rice exports.
However, last year, exports dropped 20 percent compared to the previous year, with only 17.8 million tons exported. In the first half of this year, exports were about 25 percent of the 2023 total, contributing to a global rice price surge that reached its highest level in 15 years.
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