Govt Considering Export Duty On Parboiled Rice To Cool Domestic Prices: Report

The report comes after the Centre imposed a 40 per export duty on onions last week to maintain the domestic supply and keep a tab on the onion prices

Earlier, the government banned the export of widely consumed non-basmati white rice. 

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The central government is exploring ways to tighten the rice export further in order to cool domestic food prices. After raising onion export duty, the government considering imposing a tax on shipments of parboiled rice, reported Bloomberg citing people familiar with the matter. However, it also added that no decision has been made yet and there’s no certainty deliberations will lead to the implementation. 

The report comes after the Centre imposed a 40 per export duty on onions last week to maintain the domestic supply and keep a tab on the onion prices. The export duty will be in force till December 31. Earlier, the government banned the export of widely consumed non-basmati white rice. 

The CPI-based retail inflation spiked to a 15-month high of 7.44 per cent in July 2023, with specific food commodities mainly driving the increase. The Finance Ministry's Monthly Economic Review noted that in July, Cereals, pulses, and vegetables exhibited double-digit growth compared to the corresponding period last year. 

Interruption in the supply chain of tomatoes due to white fly disease in Kolar district, Karnataka, and the swift arrival of monsoon in northern India caused a surge in tomato prices. Tur dal price also inflated due to deficient production in the Kharif season 2022-23, the ministry said.

"The government has already taken preemptive measures to restrain food inflation which, along with the arrival of fresh stock, is likely to subside price pressure in the market soon... The price pressure in food items is expected to be transitory," the report said, adding, global uncertainty and domestic disruptions may keep inflationary pressures elevated for the coming months, warranting greater vigilance by the government and the RBI. Prime Minister Narendra Modi on August 15 said that the government will take more steps to fight inflation. 

On the other hand, the decision by India to ban the export of non-basmati white rice has driven global rice prices to their highest levels in several years. Trade and industry experts are concerned that the largest global exporter of rice India might cut its shipments in half, the Bloomberg report said. 

The reports have earlier indicated that rice prices in Asia have surged to levels not seen in nearly 15 years. This surge is due to growing worries about worldwide supplies, exacerbated by dry weather affecting production in Thailand. 

Thai white rice 5 per cent broken, which serves as an Asian benchmark, has risen to $648 per tonne. This marks the highest price since October 2008, according to data from the Thai Rice Exporters Association, the report said. Over the past year, this increase in prices amounts to nearly 50 per cent.