Rice export ban clogs ports with 200,000 tonnes stock

Though most cargos had obtained customs clearance before the directorate general of foreign trade put out the notification banning white rice exports on the evening of 20 July, as much as 200,000 tonnes of the grain are still lying at ports, including 5,000 tonnes at Syama Prasad Mookerjee Port in Kolkata.

This rice is stuck in the absence of customs clearance before the government’s notification, half-a-dozen people aware of the matter said.

“Approximately half-a-million tonnes of cargo should be stuck at the ports, not more than that. The reason being people were aware of an impending change in the rice export policy as prices were shooting up for the last one month, creating inflationary fears,” said Nitin Gupta, vice president of Olam Agro India Ltd.

In its 20 July notification, the government banned exports of non-basmati white rice (semi-milled or wholly-milled), specifying that consignments would only be allowed for exports if loading on the ship had already started, besides other such conditions.

“India has seen almost 11% inflation in rice in the last one year. Buyers were not interested in purchasing at those prices and hence, sellers were struggling to sell large quantities,” Gupta added.

“There won’t be many cargos containing more than 150,000 to 200,000 tonnes at multiple ports, which may still be stuck because of the notification barring them to get custom clearance.”

Queries sent to the revenue department of finance ministry, and the ministries of ports, shipping and waterways, commerce, external affairs, food and public distribution, and commerce on Monday remained unanswered at press time.

Trade sources said big exporters are still stuck with around 5,000 tonnes rice stocks at Kolkata port.

“The quantity seems to get exported eventually as the government has kept one option open that permits exports to needy countries with special approvals by the government.”

India is the world’s largest exporter of rice, accounting for 45% of global trade.

Monthly offtake of rice from India is around 1.7-1.8 million tonnes, of which non-basmati rice is 1-1.2 mt and white rice between 500,000 and 700,000 tonnes.

Experts said after the restrictions on white rice exports and a ban on broken-rice since last September, India’s trade in the non-basmati segment is seen falling 50%.

White and broken rice together contribute almost 50-55% of India’s total non-basmati rice exports, which have come to a halt now.

Meanwhile, current weather conditions are fuelling concerns over the rice lying at ports that are stored in containers but cannot be loaded for shipment yet due to the ban.

Prolonged exposure to extreme weather conditions, such as extreme heat in West Bengal may damage these consignments.

Exporters rushed to despatch as many containers as possible in fear of the government imposing a ban on white rice.

A Kolkata-based custom house agent said, requesting anonymity, that some trucks were about to arrive at Kolkata and Haldia ports when the notification came out, blocking people from exporting the quantity.

India banned the export of non-basmati white rice in a bid to check rising prices.

Updated: 01 Aug 2023, 08:42 PM IST