The Indian government’s ban on exports of broken rice will eliminate its trade that had increased 53 per cent last year, the US Department of Agriculture (USDA) said.
In 2021, the global broken rice trade was 6.7 million tonnes (mt) and in the first half of 2022, it was up 39 per cent at 4.8 mt. Since India contributed to over 50 per cent of the global broken rice trade, its new policy — to ban its exports— will “eliminate this trade”, the USDA said in its Grain: World Markets and Trade report.
“For 2022, rice trade is estimated to contract, in part due to the new Indian policy to ban exports of broken rice,” it said.
Low cost, ample supply
Before 2021, broken rice contributed to about 10 per cent of total rice exports. For the first half of 2022, broken exports accounted for nearly 20 per cent. Demand for Indian broken rice increased last year as its costs were low and supply was abundant.
Broken rice made up 3.98 mt of India’s total non-basmati exports of 17.26 mt last fiscal with China emerging as the largest buyer. Broken rice accounted for 96 per cent of its total 1.67 mt rice imports from India. During the first four months of the current fiscal, the Communist nation bought around 1 mt.
Besides China, Vietnam and Senegal are the other major buyers. Until China arrived on the scene as the biggest buyer, the African nation was the largest buyer. Though Senegal continues to buy significant volumes as the rice is used in one of its staple dishes, it has dropped from the top spot.
For animal feed
“Since 2021, China and Vietnam have bought significant volumes of broken rice. China (the world’s largest producer) continues to be the largest rice importer and has shifted to purchasing more broken rice for animal feed. More surprisingly, Vietnam (the third largest exporter) has become a major importer, purchasing broken rice from India due to the significant difference in prices,” the USDA said.
One reason for Indian broken rice being in demand in China and Vietnam is because it is priced lower than the cereal in their own domestic market and feed grains. India’s broken rice is being exported for around $300-310 a tonne.
The ban will also result in China, Vietnam and Senegal reducing their imports.
However, Pakistan, Vietnam, Thailand, and Myanmar could offset the void created by the ban imposed by India, the USDA said.