Rice loading has stopped at Indian ports and practically a million tonnes of grain are trapped there as patrons refuse to pay the federal government’s new 20% export levy on high of the agreed contract value, 5 exporters advised Reuters on Friday.
India banned exports of damaged rice and imposed a 20% responsibility on exports of varied different varieties on Thursday because the world’s largest exporter of the grain tries to spice up native provides and calm costs after below-average monsoon rainfall curtailed planting.
“The duty became effective from midnight, but buyers are not ready to pay the duty,” stated B.V. Krishna Rao, president of the All India Rice Exporters Association (AIREA). “We have stopped loading vessels.”
India ships round two million tonnes of rice each month, with giant quantities loaded from japanese ports akin to Kakinada and Visakhapatnam in Andhra Pradesh state.
In related circumstances, New Delhi has previously offered exemptions for contracts backed by letters of credit score (LCs), or fee ensures, issued till the day the federal government made a coverage change, stated Himanshu Agarwal, govt director at Satyam Balajee, India’s largest rice exporter.
But that has not occurred this time.
“Margins are wafer-thin in rice business and exporters can’t afford to pay 20% duty. The government should allow exports against already issued LCs,” Agarwal stated.
New Delhi allowed exports in opposition to already-issued LCs when it banned wheat exports earlier this yr.
Around 750,000 tonnes of white rice are mendacity at ports, which attracts 20% responsibility from Friday, merchants estimate.
As for the damaged rice ban, India has allowed the loading of consignments which have been handed over to customs or the place the ship anchored earlier than Thursday’s notification. But loading must be accomplished earlier than Sept. 15.
At least 350,000 tonnes of damaged rice mendacity at numerous ports don’t meet these standards, and shifting cargoes again to the hinterland is just not potential, stated a New-Delhi primarily based seller with a worldwide buying and selling agency.
Stuck damaged rice shipments had been heading to China, Senegal, Senegal and Djibouti, whereas different grades of white rice had been purchased by patrons in Benin, Sri Lanka, Turkey and the United Arab Emirates, exporters stated.
The AIREA has requested the federal government to calm down the brand new guidelines for transitional cargoes totalling 750,000 tonnes of white rice and 500,000 tonnes of damaged rice.
The commerce ministry didn’t instantly reply to a request for remark.
India exports rice to greater than 150 nations and any discount in shipments would improve upward stress on meals costs, that are already rising due to drought, heatwaves and Russia’s invasion of Ukraine.
