Output of kharif rice may drop by 4-5 mn tonnes due to drought: Govt

India’s rice production this kharif season could fall by 4-5 million tonnes (mt) due to a drought in four states and a shift towards other crops elsewhere, the government said on Friday.

“In domestic production, a loss of 6-7 mt was anticipated, but due to good monsoon (rainfall) in some pockets, the loss might now reduce to 4-5 mt, which will be at par with last year’s production,” an official statement said.

In the 2021-22 crop year, India produced 111.7 mt of rice in the kharif season.

This is the first official estimate of the impact of the low monsoon rainfall in Uttar Pradesh, Bihar, Jharkhand, and West Bengal on kharif rice production. Earlier in the day, the food ministry in a presentation said rice production might drop by 10-12 mt, which was later clarified as being based on a fortnight-old data.

Food Secretary Sudhanshu Pandey in the same press conference said the Centre banned exports of broken rice on Thursday night because a “mind-boggling” increase had caused domestic shortage and increased poultry and feed meal rates.

Broken rice is largely meant for the non-human consumption and it is used as a feed meal in the poultry industry. Data sourced from various agencies shows that in financial year 2021-22 (FY22), out of the 3.8-3.9 mt of broken rice exported, around 1.6 mt (over 41 per cent) went to China for use as feed meal.

“During April-August this year (FY23), the export of broken rice rose by a mind-boggling 4,178 per cent compared to the corresponding period of 2019, while between FY18 and FY19, the export of broken rice from India had jumped by almost 319 per cent,” Pandey told reporters.

“We have kept parboiled rice and basmati rice outside the purview of any sort of restriction — be it higher export duty or total ban — because these are used for human consumption in several countries,” he said.

The share of broken rice in India’s total exports — estimated to be around 21.2 mt in 2021-22 — increased to 23 per cent in the April-August 2022 period compared to 1.34 per cent in the same period in 2019.

Pandey said apart from easing shortage in the domestic market, the export ban would ensure that the drawdown of rice from Food Corporation of India (FCI) inventories towards ethanol production is not huge.

“The ban on broken rice exports will also ensure that it is available for domestic ethanol manufacturing and the pressure on FCI rice to meet the needs of grain-based ethanol players is less,” said an industry representative from the grain-based ethanol manufacturing sector.

In full 2021-22, around 81,000 tonnes of broken rice was allotted from FCI’s godowns for ethanol production. The amount jumped to 1.4 million tonnes till August 2022 as broken rice was unavailable in the open market.

The food secretary said between January 1 and September 8, prices of broken rice increased by 37.5 percent while maize prices have also gone up by 26.31 during the same period as broken rice is simply not available.

About the government imposing 20 per cent export duty on some rice types before the ban on broken rice, Pandey said that the step will lower prices.

A government notification on banning the export of broken rice said that between September 9 and September 15, consignments and shipments where loading has started in ports before the ban and shipping bills is filed of vessels berthed or where broken rice consignments have been handed over to the customs will be allowed to be exported.

This exemption has been granted to ensure that in-transit shipments do not pile up in the ports as it happened when wheat exports were banned on May 14, 2022. Last evening, the government imposed a 20 per cent export duty on select rice varieties but kept major items like basmati out of its purview.