India scraps export tax on parboiled rice

India has scrapped the export tax on parboiled rice, buoyed by surge in inventories and expectations of a good harvest. This follows last month’s tax cut from 20% to 10% to stimulate exports. In addition, India has resumed non-basmati white rice exports with a floor price of US$490 per metric ton.

India has removed the export tax on parboiled rice after a surge in inventories and expectations of a strong harvest due to favorable monsoon rains. This follows a recent cut in the tax from 20% to 10%, aimed at boosting exports. During the first eight months of 2024, India’s parboiled rice exports had dropped by 13%, totaling 5.1 million metric tons.

The government’s decision is intended to help Indian rice traders compete more effectively with major exporters like Thailand. While this move may lower global rice prices, it could benefit Indian farmers by increasing demand and improving their earnings.

Mr. Dev Garg, Vice-President of the Indian Rice Exporters Association, stated that this action shows the government’s confidence in the upcoming crop.

Duty-free exports of parboiled rice are expected to attract buyers from price-sensitive regions, particularly Africa, as noted by Mr. B.V. Krishna Rao, President of the Rice Exporters’ Association.

India has also lifted the 10% duty on husked brown rice and rice paddy.

In addition, India allowed exports of non-basmati white rice to resume last month, setting a minimum price of US$ 490 per metric ton. Increased exports from India are expected to boost global supply, putting pressure on other major exporters like Pakistan, Thailand, and Vietnam to lower their prices.

India had imposed export restrictions in 2023 due to fears of weak monsoon rains caused by the El Niño effect. Since then, local supplies have increased, leading to a rise in government-held stockpiles.