India allows rice exports backed by already issued letters of credit

MUMBAI: India said it will allow cargoes of white and brown rice backed by letters of credit issued before September 9 to be shipped overseas, a measure that provides some relief to exporters grappling with fresh government curbs.

The world’s biggest exporter of rice on September 8 banned exports of broken rice and imposed a 20% duty on exports of various grades as it sought to boost domestic supply and calm local prices after below-average monsoon rainfall curtailed planting.

The surprise move trapped nearly 1 million tonnes of rice at ports or which had been in transit before the government made the announcement.

“It’s a big relief, which we have been asking for the last few weeks,” said BV Krishna Rao, president of the Rice Exporters Association.

Export prices for Indian white rice have risen 12% since Sept. 9.

The government also said in its notice issued late on Monday that it would allow 600,000 tonnes of unmilled rice to be exported to Nepal, which traditionally relies on India to fulfil its food grains requirements.

India accounts for more than 40% of global rice shipments and competes with Thailand, Vietnam, Pakistan and Myanmar.

New Delhi last month allowed 397,267 tonnes of broken rice to be exported.