India Considers Reviving Broken Rice Export Restrictions as Prices Surge Beyond $360 per Tonne, Warns IREF.

India is considering the reintroduction of export restrictions on 100 percent broken rice due to rising international prices, which have reportedly surpassed USD 360 per tonne. The Indian Rice Exporters’ Federation (IREF) has highlighted the growing competition for broken rice between domestic industries, such as ethanol manufacturers and poultry feed producers, and overseas buyers. The average wholesale price of broken rice in India has seen a significant increase, escalating by 5.3 percent to Rs 3,036 per quintal over the past month. With Assembly elections approaching in five states in 2027, there are concerns that the government may intervene to stabilize domestic prices amid rising inflationary pressures.

The potential for renewed export restrictions could have far-reaching implications for the common citizen and the market. For consumers, higher domestic prices may lead to increased food inflation, negatively affecting purchasing power and standard of living. Concurrently, these restrictions may complicate market dynamics, impacting exporters who rely on international sales, and potentially limiting availability and price competitiveness of broken rice in both domestic and global markets. Uncertainty surrounding export policies may introduce volatility in pricing and supply chains, creating a cautious atmosphere among investors and stakeholders in the agriculture sector.

In the long term, the government and the RBI are likely to focus on balancing domestic supply needs with agricultural policy objectives, including the ethanol-blending program. The production of rice is expected to remain robust, with an estimated high output of 154.02 million tonnes in the 2025-26 season. Nevertheless, the specific supply-demand dynamics surrounding broken rice may necessitate ongoing policy evaluations. Any government actions will need to consider the implications for both farmers and exporters while ensuring food price stability ahead of forthcoming elections. Stakeholder consultation will be crucial for navigating these complexities effectively.

Source: The Hindu

(Expert Note: This report was independently prepared by the Wealthova Economy team.)