India Mulls Fresh Restrictions on Broken Rice Exports Amid Price Rise

India faces potential export curbs on broken rice as domestic prices rise due to high demand from ethanol manufacturers and international market pressures. The IREF warns that government intervention may be needed to ensure local availability.

Potential Export Restrictions Loom Over Broken Rice

New Delhi [India], November 3 (ANI): India's broken rice exports could face fresh restrictions as rising international prices, increasing demand from ethanol manufacturers and domestic inflationary pressures raise concerns over availability, the Indian Rice Exporters' Federation (IREF) said. The Federation said international prices of 100 per cent broken rice have reportedly crossed USD 360 per metric tonne, raising the possibility of government intervention to prioritise domestic requirements.

According to the Department of Consumer Affairs, the all-India average wholesale price of broken rice stood at Rs 3,036 per quintal on November 2, compared with Rs 2,883 per quintal on October 10, registering an increase of 5.3 per cent in just over three weeks. The Wholesale Price Index (WPI) for broken rice also recorded year-on-year inflation of 5.38 per cent in September 2026, up from 4.37 per cent in August, indicating mounting domestic price pressures.

Industrial Demand and Supply Concerns

"The increase in broken rice prices beyond USD 360 per tonne warrants serious attention. Broken rice has become an important industrial raw material for ethanol manufacturing, poultry feed and several other industries," Vinod Kaul, Director General, IREF, said. "Competition between domestic industries and export markets is putting pressure on availability and prices. If this trend continues, the possibility of restrictions on broken rice exports cannot be ruled out," he added.

IREF attributed the rising demand for broken rice partly to India's expanding ethanol-blending programme, which has increased the requirement for grain-based feedstocks, including broken rice, maize and surplus rice released by the Food Corporation of India (FCI). While the government has permitted the use of surplus FCI rice for ethanol production, commercial distilleries also procure raw materials from the open market, putting them in competition with poultry-feed manufacturers and exporters.

Economic Impact and Historical Context

The Federation said rising broken rice prices could increase production costs across these industries and potentially add to broader inflationary pressures. Earlier in September 2022, the government had prohibited broken rice exports over concerns regarding domestic availability and demand. The restrictions remained in force until March 7, 2025, when exports were restored under the free category.

Although India's overall rice supply remains comfortable, with record production estimated at 154.02 million tonnes in 2025-26 against 150.18 million tonnes in the previous year, IREF cautioned that higher overall production does not necessarily guarantee adequate availability of 100 per cent broken rice. India exported approximately 21.57 million tonnes of rice during 2025-26, maintaining its position as the world's leading rice exporter.

"Domestic price stability and adequate feedstock availability for ethanol manufacturing are important policy considerations," Kaul said. IREF advised exporters to exercise caution while entering into forward contracts and closely monitor domestic prices, milling arrivals and demand from the ethanol sector. The Federation also urged the government to consult industry stakeholders before introducing any export restrictions and provide reasonable transition arrangements for existing contracts, letters of credit and committed shipments. (ANI)

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