India Considers Extending Parboiled Rice Tax, Potentially Impacting World Supply

Ira Singh
Khabar Khabaron Ki,09 Feb’24

India the world’s top rice shipper, is reportedly contemplating an extension of its tax on parboiled rice exports,as part of efforts to ease food inflation ahead of national elections, a move that could keep world supply tight and send prices to new peaks.

The government of Prime Minister Narendra Modi, who will seek a third term in the polls due in the first half of this year is considering keeping the tax at 20%. No immediate proposal to ban exports, according to reports. Extension of the tax could keep world supply tight and raise prices. Measures to control food inflation include curbing exports, cracking down on hoarding, and providing subsidized rice to retail customers.

The proposed measure has raised concerns among international stakeholders,as any such move could add to the rally in benchmark Asian rice prices, which are hovering near a 15-year high after India began restricting sales of key varieties in 2023. That would be bad news for some countries in West Africa and the Middle East that rely on the South Asian nation for most of their requirements of the food staple.