MUMBAI: Due to purchasers’ refusal to pay the government’s additional 20% export fee on top of the negotiated contract price, rice loading at Indian ports has ceased, trapping close to one million tonnes of grain there.
On Thursday, India, the world’s largest exporter of the grain, banned the export of broken rice and placed a 20 percent levy on several other types of exports in an effort to increase domestic supplies and stabilise prices after sowing was hampered by below-average monsoon rainfall.
The levy went into force at midnight, but B.V. said that consumers are not prepared to pay the duty. Krishna Rao, the All India Rice Exporters Association’s president (AIREA). “We’ve given up loading ships.”
According to Himanshu Agarwal, executive director at Satyam Balajee, India’s largest rice exporter, New Delhi has in the past granted exclusions for contracts supported by letters of credit (LCs), or payment guarantees, issued up until the day the government changed its policy. But this time, that hasn’t happened.
“Margins in the rice industry are razor-thin, and exporters cannot afford to pay a 20 percent levy. Exports should be permitted in accordance with LCs that have already been given, according to Agarwal.