The Indian government has imposed a restriction on the export of de-oiled rice bran until November 30, 2023, a Directorate General of Foreign Trade (DGFT) notification said on July 28, 2023. The move was implemented to help lower rice prices and secure its availability in India. The prohibition is likely to have minimal impact on the costs of milk and calf feed, an industry group stated in an official report. Let’s explore the recent notification in brief.
De-oiled rice bran is a by-product of the rice milling process. It is a high-protein, high-fiber feed ingredient that is used in the production of cattle feed, poultry feed, and aqua feed. It is also used in the production of some human foods, such as bread and noodles. The government's decision to restrict the export of deoiled rice bran is reportedly aimed at ensuring that there is enough of this commodity available for domestic use. However, industry groups say that the restriction is unnecessary and it will only lead to higher prices for cattle feed and milk.
"Export of de-oiled rice bran under ITC HS code 2306 and under any other HS code is prohibited until November 30, 2023," the DGFT stated in a notification.
Due to a shortage of supply, the price of de-oiled rice bran (DORB) has climbed significantly in recent weeks from 5,000 to 18,000 – 18,500 a tonne. De-oiled rice bran, which is used in the livestock feed business, is one of India's top exports.
According to a report by the news agency PTI, the food ministry stated in an official statement that the export policy for basmati rice, which makes up the majority of exports, and par-boiled non-basmati rice would remain unchanged.
The Solvent Extractors' Association of India (SEA), the apex body of the oilseeds and fats industry, has called on the government to reconsider its decision. SEA says that the restriction will hurt the domestic rice bran processing industry, which employs over 1 million people. It will also lead to higher prices for cattle feed, which will impact the dairy industry and the rural economy.
SEA also says that the restriction is unnecessary, as there is enough deoiled rice bran available for both domestic and export markets. In fact, India is a net importer of deoiled rice bran, and the restriction will only make India more dependent on imports.
The government has not yet responded to the calls from industry groups to reconsider the restriction. However, it is likely that the restriction will remain in place until November 30, 2023.
In the meantime, the restriction is likely to have a number of negative consequences for the domestic rice bran processing industry, the cattle feed industry, and the dairy industry. It is also likely to lead to higher prices for deoiled rice bran in the global market.
Did you know? Central Government imposed restrictions on exports of non-basmati white rice
The Union government restricted the export of non-basmati white rice recently. The government changed the export policy from "free with an export duty of 20%" to "prohibited" with immediate effect. In a statement, the directorate general of foreign trade (DGFT) stated that the "export policy of non-basmati white rice is amended from free to prohibited."
According to the central government, the initiative aims to ensure cheaper prices and a sufficient supply for the duration of the upcoming festival season. The cost of rice is increasing in the domestic market. According to the statement, retail prices have increased by 3% over the past month and by 11.5% over the previous year.
In order to control prices and ensure supplies on the home market, the government imposed a 20% export fee on non-basmati white rice prior to September 8, 2022. Based on Rice export data, Rice exports increased from 33.66 lakh metric tons in September through March of the previous fiscal year to 42.12 lakh metric tons in 2022–23.
Basmati rice is long-grain aromatic rice that is grown in the foothills of the Himalayas in India and Pakistan. It is known for its distinct flavor and aroma, and it is a popular choice for both domestic and international consumers.
India is the leading exporter of Basmati Rice to the global market. Based on Rice Export Data, India exported around 45 lakh metric tons of basmati rice, which accounted for 62% of the total rice exports from the country in the fiscal year 2022–23.
The major export destinations are:
The following are the top 5 countries that imported non-basmati rice from India in the fiscal year 2022–23:
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The rice bran processing industry is a major employer in India, with over 1 million people employed in the sector. The restriction on the export of deoiled rice bran is likely to lead to job losses in this sector as mills will be forced to cut production.
The restriction will also impact the profitability of rice bran processing mills. Mills will have to sell their deoiled rice bran at a lower price in the domestic market as there will be more supply and less demand. This will reduce the margins for mills and could lead to some mills closing down.
The cattle feed industry is another major user of deoiled rice bran. The restriction on the export of deoiled rice bran is likely to lead to higher prices for cattle feed. This is because mills will have to compete with the domestic market for deoiled rice bran, which will drive up prices. Higher prices for cattle feed will impact the dairy industry, as farmers will have to spend more money on feed for their cows. This could lead to lower milk production and higher milk prices for consumers.
The restriction on the export of deoiled rice bran is likely to lead to higher prices for deoiled rice bran in the global market. This is because India is a major exporter of deoiled rice bran, and the restriction will reduce the supply of this commodity in the global market. Higher prices for deoiled rice bran will impact the livestock and poultry industries in other countries. This is because deoiled rice bran is a major feed ingredient for these industries.
Conclusion
The government's decision to restrict the export of deoiled rice bran is likely to have a number of negative consequences for the domestic rice bran processing industry, the cattle feed industry, the dairy industry, and the global market. It is important for the government to reconsider this decision and find a way to balance the need to ensure domestic availability of deoiled rice bran with the need to protect the interests of the rice bran processing industry and the global market.
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