India scraps 10% duty on parboiled rice outflows, boosting trade potential

India has removed a 10% duty on parboiled rice outflows with immediate effect, the Ministry of Finance said Oct. 22, enhancing the country's rice export potential.

In September, India slashed the export duty on parboiled rice from 20% to 10%, lifted the ban on non-basmati white rice exports, and introduced a minimum export price of $490/mt in response to swelling granaries and a bumper harvest expected from the upcoming new Kharif season crop.

Market sources said the move could aid local milled rice prices, with some millers looking to increase prices by Rupees 2,000/mt ($23.7/mt) from around Rupees 34,500/mt as of Oct. 22.

India banned the export of broken rice in July 2023 and imposed additional duties on non-basmati white rice outflows to support local consumption. In August 2023, the government imposed a 20% duty on the shipments of parboiled rice.

Price impact

With no export duty, market participants expect Indian parboiled 5% export prices to decline and likely be offered below or at the same levels as white rice.

Platts, part of S&P Global Commodity Insights, assessed India parboiled 5% STX at $477/mt FOB on Oct. 22, down $3/mt on the week and $60/mt lower on the month.

Following the relaxation of export restrictions on parboiled rice, market participants are optimistic that the government could also remove the minimum export price on white rice.

India is forecast to export 20.5 million mt of rice in marketing year 2024-25 (October-September), rising 37% on the year, according to Commodity Insights.