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Indian Traders Raise Rice Export Prices Amid Duty Hike and Soft Demand

Rice Export

Rice export prices from India, one of the world's leading exporters, have witnessed a modest surge this week. This uptick is attributed to various factors including a recent government policy shift and subdued demand in key markets.

Traders have adjusted prices upwards, responding to the government's alteration in calculating the 20% export duty. Instead of the previous Free on Board (FOB) value method, authorities are now considering the total transaction value. This change has exerted upward pressure on export prices, prompting Indian exporters to hike rates.

"We've had to raise prices since the government is considering the total transaction value instead of Free on Board (FOB) value to calculate the 20% export duty. This has pushed our export prices higher," remarked a representative from the trading sector.

This adjustment comes in the wake of a 20% export duty on parboiled rice exports implemented by New Delhi back in August 2023, aimed at addressing concerns over domestic prices.

However, exporters in India are now facing an unexpected hurdle with the customs department issuing notices demanding payment of duty differentials on rice exported over the past 18 months. This unforeseen tax demand has the potential to significantly disrupt rice shipments from India.

Meanwhile, in the global market, demand for rice remains soft, particularly in Thailand where prices have declined. Thailand's 5% broken rice prices are currently quoted at $585-$590 per ton, down from the previous week's range of $598. The weakening baht and subdued demand are cited as contributing factors to this decrease.

In Vietnam, while rice prices remain relatively cheaper, there's mounting pressure due to the nearing end of the local supply season. Vietnam's 5% broken rice is offered at $590-$595 per metric ton, unchanged from the previous week. However, exporters have curtailed purchases from farmers in response to a US forecast projecting a potential reduction in rice imports by the Philippines, Vietnam's largest rice export market.

In Bangladesh, despite favorable yields and reserves, rice prices continue to remain high. In an effort to stabilize prices, officials are contemplating allowing private traders to import up to 200,000 tonnes of rice.

The fluctuating dynamics in the global rice market underscore the complexities faced by both exporters and importers amidst policy changes, demand variations, and external market conditions. As stakeholders navigate these challenges, the focus remains on ensuring stability and sustainability within the rice trade sector.


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