Broken Rice Crosses $360/Tonne Benchmark, Raising Risk of Fresh Export Ban

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New Delhi: An escalating scramble for grain between Indian distillers, feed mills, and overseas buyers is placing outbound shipments of broken rice under renewed threat of government curbs.

Despite solid domestic harvests, trade representatives warn that a fast-tightening local market could soon compel policymakers to step in to protect internal supplies.

The pressure is visible across official price trackers. Figures released by the Department of Consumer Affairs show countrywide wholesale rates for broken rice reached Rs 3,036 per quintal on November 2, climbing 5.3 per cent from the Rs 2,883 per quintal recorded on October 10. That sharp three-week surge aligns with broader price indicators: the Wholesale Price Index (WPI) for the commodity accelerated to a year-on-year inflation rate of 5.38 per cent in September 2026, advancing from 4.37 per cent in August.

Overseas benchmarks are moving in tandem. Global quotes for 100 per cent broken grain have breached USD 360 per metric tonne, creating an attractive arbitrage for exporters while simultaneously squeezing domestic end-users.

Vinod Kaul, Director General of the Indian Rice Exporters’ Federation (IREF), cautioned that this crossing of the USD 360 per tonne threshold demands immediate policy focus. Broken grain, he noted, has evolved into a vital industrial feedstock for ethanol distilleries, animal feed processors, and ancillary manufacturers. According to Kaul, the direct rivalry between local industrial consumers and foreign buyers is straining supplies and lifting costs—a dynamic that could make fresh curbs on overseas sales inevitable if left unchecked.

At the core of the crunch is the country’s accelerating ethanol-blending initiative. The aggressive mandate has driven up industrial appetite for grain feedstocks, including broken rice, maize, and surplus grain stocks released through the Food Corporation of India (FCI).

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Yet official channels have not fully insulated the open market. Even though authorities have cleared surplus FCI rice reserves for biofuel conversion, commercial distilleries continue to actively buy open-market grain. That puts distillers into head-to-head competition with livestock feed millers and grain exporters, generating cost inflation across downstream processing sectors.

Export restrictions on this segment are not unprecedented. New Delhi previously outlawed broken rice shipments in September 2022 to safeguard domestic food security and tame price spikes, maintaining the ban until March 7, 2025, when outbound consignments were restored under the free category.

The renewed supply tension comes during an otherwise banner agricultural cycle. India produced an estimated record of 154.02 million tonnes of rice during 2025-26, improving upon the 150.18 million tonnes harvested the preceding year. During the same 2025-26 period, the country shipped roughly 21.57 million tonnes abroad, solidifying its rank as the globe’s top rice supplier.

However, the IREF pointed out that record grain harvests across the board do not automatically translate into a surplus of 100 per cent broken rice. Kaul emphasized that maintaining stable domestic retail rates alongside securing sufficient fuel-blending feedstocks remain critical priorities for state economic planners.

In light of the potential regulatory shift, the federation has advised grain trading firms to approach forward deals with caution, urging them to track mandi arrivals, domestic spot quotes, and ethanol procurement closely.

The trade body also appealed to the government to hold formal discussions with industry representatives prior to implementing any curbs, stressing that any policy changes must provide transition windows for active contracts, letters of credit, and already-committed port shipments.

(Source: ANI)

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