India Extends Parboiled Rice Export Tax to Control Prices

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India, the world’s top rice exporter, extended a tax on outbound shipments of the parboiled variety to prevent any increase in domestic prices ahead of general elections.

The 20% export levy, which was due to expire on March 31, will be valid for an indefinite period, according to a finance ministry notification late Wednesday, confirming a Bloomberg News report earlier this month.

With elections just a few months away, the government of Prime Minister Narendra Modi is worried about rising food prices which make up about half of India’s consumer price basket. Food inflation was 8.3% in January.

The move by the world’s second-biggest rice grower will continue to squeeze global supplies and boost international prices. That would be a blow to some countries in West Africa and the Middle East that rely on India for most of their requirements of the food staple.

Parboiled rice, which accounted for about 30% of India’s total exports before the curbs, is the result of a process that involves partial boiling of paddy before milling to boost its nutritional values and change the texture of cooked rice. The South Asian nation had a share of about 40% in the global rice trade in 2022-23.

--With assistance from Shruti Srivastava.

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