Export ban leaves thousands of tonnes of rice stranded at Indian ports

After the government announces export restrictions on rice, cargo and containers full of rice are lying at Indian ports unshipped.

Though most cargos had obtained customs clearance before the directorate general of foreign trade put out the notification banning white rice exports on the evening of 20 July, as much as 200,000 tonnes of the grain are still lying at ports, including 5,000 tonnes at Syama Prasad Mookerjee Port in Kolkata.

Almost half a dozen people who are aware of the matter said that the absence of customs clearance before the government’s notification has resulted in 2,00,000 tonnes of rice being stuck.

“Approximately half-a-million tonnes of cargo should be stuck at the ports, not more than that. The reason being people were aware of an impending change in the rice export policy as prices were shooting up for the last month, creating inflationary fears,”

Nitin Gupta, senior vice president of Olam Agro India Ltd.

The government in its 20 July notification banned exports of non-basmati white rice (semi-milled or wholly-milled), specifying that consignments would only be allowed for exports if loading on the ship had already started, besides other such conditions.

“India has seen almost 11% inflation in rice in the last year. Buyers were not interested in purchasing at those prices and hence, sellers were struggling to sell large quantities,” Gupta added.

“There won’t be many cargos containing more than 150,000 to 200,000 tonnes at multiple ports, which may still be stuck because of the notification barring them to get customs clearance.”

As per sources, big exporters are still stuck with around 5,000 tonnes of rice stocks at Kolkata port.

“The quantity seems to get exported eventually as the government has kept one option open that permits exports to needy countries with special approvals by the government.”

India’s export of rice accounts for 45% of global trade, making it the world’s largest exporter. India on a monthly bases has a rice offtake of around 1.7-1.8 million tonnes, of which non-basmati rice is 1-1.2 mt and white rice between 500,000 and 700,000 tonnes.

As per experts, the government’s restriction on white rice exports and a ban on broken rice since last September, has resulted in a 50% fall in India’s trade in the non-basmati segment.

White and broken rice together contribute almost 50-55% of India’s total non-basmati rice exports, which have come to a halt now.

Meanwhile, current weather conditions have raised concerns about rice stored in containers at ports but cannot be loaded onto ships due to restrictions. Prolonged exposure to extreme weather conditions such as the temperature in West Bengal can damage this cargo. Fearing the government’s ban on free rice, 4,444 exporters shipped as many as possible.

A customs official in Kolkata, who asked not to be named, said that when the warning was issued, some trucks were about to arrive at the Kolkata and Haldia ports against people coming in value from exports.
India bans exports of white rice other than basmati to raise prices.

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