22 July 2023, New Delhi: The government of India amended the policy for the export of rice in a notification released on 8 September 2022. the notification came into effect on 9th September 2022. As per the notification, the export of broken rice from India will be allowed based on permission from the Government of India. The notification end date has been extended multiple times from the date of release. A recent notification released by the government on 20th July 2023 shared the procedure for the allocation of quota for the export of broken rice on humanitarian and food security grounds.
Acting on the notification, Saurabh Sanyal, CEO & Secretary General of PHD Chambers of Commerce submitted a representation to Santosh Kumar Sarangi (IAS) Additional Secretary & Director General of Directorate General of Foreign Trade (DGFT) requesting amendments. A copy of the submission received by Krishak Jagat from PHD Chambers mentions nine crucial reasons.
The Chamber mentioned that this notification will lead to financial losses for small and marginal farmers and will have a negative impact on small, medium, and micro industries.
The letter mentions that prior to this notification, no consultation or discussion has taken place with major rice export associations across the country. It seems that decisions were made only considering the interests of large vessels.
The Chamber further requested that since Chhattisgarh is a landlocked state, permission should be granted for the export of broken rice through containers. It is known that Chhattisgarh produces 2 million metric tons of rice. Since many states in the country also produce broken rice, permission should be given for export in container cargo under the SME Export in India.
Exporters in the SME sector will benefit from providing a minimum of 2000 metric tons and a maximum of 25000 metric tons for exports, which will also promote competition. Since the rental cost of large vessels is higher and the rental cost for containers is comparatively lower. approval for export should be given through containers resulting in additional savings for the country. It is worth noting that container usage has been beneficial in three countries: Senegal, Zambia, and Indonesia, which has been practiced previously.
The letter mentions that, as per the current situation, the ocean freight for Indonesia is $100 for 26-27 MT containers, which is less than $4 per metric ton, while the wholesale vessel freight is around the minimum of $30 pmt. The situation is the same for Dakar and Gambia, where the freight for bulk carriers is around $35-40 per metric ton, while the freight for wholesale vessels is $60 per ton.
Mr. Sanyal mentioned, “The export of broken rice should be seen in the global context rather than considering it for selected countries. It would be appropriate to calculate the average export for the stipulated period of consideration for export limits by taking into account the figures for the years 2020-21, 2021-22, and 2022-23.
A copy of the notification (Trade notice no. 08/2023, 20th July 023) can be accessed here.
