India Lifts Ban on 100% Broken Rice Exports

The Indian government has lifted the ban on 100% broken rice exports, which had been in effect since September 2022. The Directorate-General of Foreign Trade (DGFT) announced late Friday that exports of broken rice are now "free", changing its previous "prohibited" status.

Reasons Behind the Policy Change

India's rice storages are currently overflowing, and the export industry has been lobbying for the ban to be lifted. Before the ban, major buyers of Indian broken rice included Senegal, China, and Vietnam. The ban was originally imposed to ensure sufficient domestic supplies.

Trade experts had anticipated this policy shift for about a week. However, India now faces the challenge of finding buyers in a competitive market where Vietnam and Pakistan are offering attractive prices.

Competitive Pricing in the Global Market

India might need to offer competitive rates, possibly higher than those of Vietnam and Pakistan, to secure sales.

Impact on Global Rice Market

The resumption of Indian 100% broken rice exports could increase pressure on an already bearish global rice market. Rice prices are currently at 2-year lows, with global production and ending stocks projected to be higher. Additionally, demand remains sluggish as many buyers are already well-stocked. The arrival of new crops in Asia is also contributing to downward pressure on prices.

Conclusion: India Faces a Tough Market Amid Price Pressure

While lifting the export ban on 100% broken rice opens new opportunities for Indian exporters, the global market's low prices and strong competition could limit immediate gains. The next few weeks will be crucial for assessing whether India can reclaim its share in traditional markets or if competitive pricing from Vietnam, Pakistan, and Thailand will dominate the trade.