Lifting of Non-Basmati White Rice Export Ban (GS Paper 2, Health & Food)
Why in News?
The Indian government has recently lifted the ban on the export of Non-Basmati White Rice, setting a minimum export price (MEP) of $490 per tonne.
This decision follows the earlier removal of a 20% export duty on Non-Basmati White Rice and a reduction of export duties on other rice categories.
Rice Cultivation in India
Crop Seasons
Kharif Season: Predominantly cultivated from June to November during the monsoon.
Rabi Season: In some irrigated regions like Tamil Nadu, rice is grown from November to April.
Climatic Conditions
Temperature: Requires an average temperature of 21°C to 37°C; optimal for germination is around 21°C.
Rainfall: Needs 150-300 cm of rainfall during the growing season, ideally evenly distributed.
Soil: Thrives in clayey or loamy soils, particularly in alluvial river basins.
Water Requirements
Rice is a water-intensive crop typically cultivated in flooded fields (paddy fields). Sufficient irrigation is essential, especially in areas with inadequate rainfall.
Rice Production in India
Area of Cultivation: Approximately 47.6 million hectares for rice in fiscal year 2024.
Production Volume: Estimated at 1378.25 lakh metric tons (LMT) for 2023-24, reflecting a 20.70 LMT increase from the previous year.
Geographical Distribution
Rice is produced across various regions, including the eastern and western coastal strips, the plains of Assam, and the foothills of the Himalayas.
India’s Status as a Rice Exporter
Global Standing: India is the second-largest rice producer and the largest exporter, contributing significantly to the global rice trade. Along with China, India accounts for over half of the world's rice production.
Export Statistics: In 2023, India accounted for 33% of the world's rice exports (17 million tonnes), while in 2022, it contributed about 40% (56 million tonnes) prior to the export ban.
Export Breakdown
India’s rice exports are categorized into basmati and non-basmati varieties.
Basmati rice constitutes nearly one-third of total rice exports, while non-basmati rice includes several subcategories, including the recently banned non-basmati white rice.
Major Export Destinations
Key markets for Indian rice exports include Saudi Arabia, Iran, Iraq, and several African nations.
Saudi Arabia primarily imports basmati rice, while non-basmati white rice is significantly exported to countries like Kenya and Mozambique.
Competitors in the Global Market
India faces competition from Thailand and Vietnam, whose combined rice exports in 2023 nearly equaled those of India.
Other notable exporters include Pakistan, Cambodia, and the United States.
Details on the Lifting of the Export Ban
About the Decision
The export ban on Non-Basmati White Rice has been lifted, but with a minimum export price set at $490 per tonne.
Reasons for Lifting the Ban
Increased Paddy Sowing: A favorable monsoon has led to a rise in paddy sowing, with a 2.2% increase over the previous year.
Record Rice Production: Estimated total production for 2023-24 stands at 137.82 million tonnes, marking a 1.5% increase.
Declining Wholesale Prices: Recent reductions in wholesale rice prices, alongside a stabilizing retail inflation rate.
Surplus Rice Stocks: The Food Corporation of India (FCI) holds substantial rice stocks, exceeding the required buffer stock norms.
Beneficiaries of the Ban Lifting
Traders: Relief from the previous 20% duty is expected to improve export sentiment.
Farmers: Growers of premium rice varieties, such as Sona Masoori, are likely to benefit from renewed export opportunities.
Domestic Consumers: However, there is concern that already high retail prices may rise further due to increased export activity.
Conclusion
The lifting of the export ban on Non-Basmati White Rice is poised to positively impact traders and farmers while simultaneously raising concerns over domestic rice prices.
The government’s measures reflect an effort to enhance India’s position in the global rice market while balancing domestic needs.
