India allows broken rice exports backed by already issued Letter of credit

India will allow overseas broken rice shipments of 397,267 tonnes backed by letters of credit (LCs) issued before Sept. 8,2022 the government, as a sudden ban on exports of the grain prevented the loading of cargoes. India banned exports of broken rice as the world's biggest exporter of the grain tries to augment supplies and calm local prices after below-average monsoon rainfall curtailed planting. The surprise move trapped nearly 1 million tonnes of rice that was moved to the ports or was in transit before the government made the announcement.

The concession to allow exports against already issued Lcs will help traders as a lot of cargoes were trapped and buyers were requesting quick dispatch, said B.V. Krishna Rao, president of the Rice Exporters Association.

He added that for many low income African countries, buying from other suppliers meant paying a "very high price". Indian broken rice was at least 30% cheaper than other origins.

China was the biggest buyer of Indian broken rice - which it uses for animal feed - with purchases of 1.1 million tonnes in 2021, while African countries such as Senegal and Djibouti bought broken rice for human consumption. India accounts for more than 40% of global rice shipments and competes with Thailand, Vietnam, Pakistan and Myanmar in the world market.

Source: Reuters