Agreement Highlights: Strengthening India-Indonesia Trade Relations

The Indian Cabinet approved the export of 1 million tonnes of non-basmati white rice to Indonesia, with National Cooperative Export Ltd (NCEL) serving as the primary export channel. Announced by Union Agriculture Minister Shivraj Singh Chouhan, the agreement involves collaboration with Indonesia's government agency, Bulog, ensuring a streamlined export process.

Operational Strategy: Protecting Domestic Buffer Stocks

To fulfill the agreement, NCEL will source rice directly from the open market, avoiding the use of India’s buffer stocks. This decision eliminates concerns over domestic food security while facilitating a structured transaction. A pricing formula has been established to maintain transparency in sales to Bulog.

Global rice prices, which had dipped over 10% earlier, began to rebound in mid-November. Key drivers for the price recovery included reduced export restrictions from India and competitive pricing by other major exporters like Pakistan and Thailand. Strong demand from the Philippines and Far-Eastern countries also contributed, pushing prices up by $10 per tonne by late November.

Recent Export Policy Changes

India has undergone a series of policy shifts concerning rice exports over the past two years:

• September 2022: Ban on broken rice exports and a 20% duty on white rice exports.
• July 2023: Ban on white rice exports and 20% duty on parboiled rice shipments.
• October 2024: All restrictions lifted, allowing freer export movement.

Additionally, a minimum export price of $950 per tonne was set for basmati rice, which remains in place.

Despite weather challenges, India’s rice production for the 2023–24 season stood at 137.82 million tonnes, with the kharif crop contributing 119.93 million tonnes. Between April and October 2024, India exported 5.77 million tonnes of non-basmati rice, earning $2.79 billion.

Conclusion: Balancing Exports and Domestic Needs

This agreement with Indonesia strengthens India’s trade ties while ensuring domestic food security through its open-market sourcing strategy. By capitalizing on the recovering global rice market, India reinforces its position as a reliable rice exporter and a key player in global agricultural trade.









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