India withdraws export ban on 100% broken rice

India, the world's largest rice exporter, has revoked the ban on the export of 100% broken rice to reduce the burgeoning domestic stockpile of the grain, a move that could potentially lead to a drop in global rice prices.

The Directorate General of Foreign Trade (DGFT), in a notification dated March 7, amended the export policy of broken rice, shifting it from the "Prohibited" to "Free" category with immediate effect.

The restriction had been in place since September 2022.

Rice-related stocks were in demand on March 10, as these stocks rallied up to 6.5% in intraday deals on the Bombay Stock Exchange of India.

It is estimated that India could ship more than two million tonnes of broken rice to international markets.

The ban was initially imposed due to concerns over El Niño-induced weaker monsoons, which led to lower rice production in 2023.

However, surplus rainfall in 2024 resulted in a bumper rice harvest, prompting the government to ease the restriction.

The decision to lift the ban on the export of 100% broken rice came after a surge in inventories that reached a record high in early February—almost nine times the government's target.

It could also provide lower-cost grain to poorer African countries while benefiting Asian animal feed and ethanol producers that rely on this grade of rice.

India had also imposed restrictions on all other rice grades in 2023 due to concerns over production stemming from poor rainfall.

However, as the supply situation improved after the country harvested a record crop, India removed curbs on exports of all grades except 100% broken rice.