India Slashes Parboiled Rice Export Duty Amid Surging Stocks

India reduced the export duty on parboiled rice from 20% to 10% due to rising inventories and upcoming harvests. This measure aims to lower export prices and boost shipments, impacting global competitors. The export duties on brown and husked rice were also cut, with white rice duties eliminated entirely.

In a significant move, India announced a reduction in the export duty on parboiled rice from 20% to 10%, according to a government notification released on Friday. The world's largest rice exporter is acting as inventories surge and a new crop is set for harvest in the coming weeks.

This reduction in export duty is expected to lower India's export prices, subsequently boosting shipments and compelling competitors like Thailand, Vietnam, Pakistan, and Myanmar to slash their prices.

The Indian government had initially imposed a 20% duty on parboiled rice exports in 2023 due to subpar rainfall affecting the crop. The new policy also reduces duties on brown and husked rice to 10% and sets the export duty on white rice to zero. However, it remains unclear whether private traders will be permitted to export, or if transactions will be restricted to government-to-government deals.

Earlier this month, India scrapped a floor price for basmati rice exports to assist farmers struggling to access lucrative markets, including Europe, the Middle East, and the United States. As of September 1, rice stocks at the Food Corporation of India were 32.3 million metric tons, a 38.6% increase from last year. Thanks to favorable monsoon rains, rice has been planted on 41.35 million hectares, surpassing last year's 40.45 million hectares and the five-year average of 40.1 million hectares for the staple crop.

(With inputs from agencies.)