India, the world’s largest exporter of the grain, tried to increase supplies and stabilise local prices on Thursday after planting was hampered by below-average monsoon rainfall by banning the sale of broken rice and imposing a 20% levy on exports of various grades of the grain.
The new tax will probably deter customers from buying from India and lead them to rivals Thailand and Vietnam instead, which have been battling to boost shipments and raise costs.
Basmati and parboiled rice are exempt from the export tariff, which will take effect on September 9.The tariff will have an effect on white and brown rice, which account for more than 60% of India’s exports, according to B.V. Krishna Rao, president of the All India Rice Exporters Association.
“The tariff will make rice exports from India less competitive on the world market. The consumer base will migrate to Vietnam and Thailand, “Rao said.India competes with Thailand, Vietnam, Pakistan, and Myanmar for market share of more than 40% of the world’s rice shipments.
Concerns have been raised about India’s rice production due to below-average rainfall in important rice-producing states like West Bengal, Bihar, and Uttar Pradesh. This year, the nation has already restricted sugar shipments and outlawed the export of wheat.
