Broken Rice Exports Under Threat as Global Prices Surge
Rising global prices and ethanol demand may lead the Indian government to restrict broken rice exports to curb domestic inflation.
India's position as a leading global supplier of broken rice is facing a potential shake-up. The Indian Rice Exporters' Federation (IREF) has sounded an alarm, warning that broken rice exports threat is becoming a reality as international prices soar and domestic demand intensifies, potentially prompting the government to step in with fresh restrictions.
Global Prices Hit Critical Mark
According to the IREF, the international price for 100 per cent broken rice has reportedly climbed beyond USD 360 per metric tonne. This price surge has put the industry on edge, as such spikes often lead the Indian government to prioritize domestic availability over international trade to keep local prices stable.
Domestic Price Pressure Mounting
The trend is already visible within India's own markets. Data from the Department of Consumer Affairs reveals a sharp uptick in wholesale costs:
- November 2: All-India average wholesale price reached Rs 3,036 per quintal.
- October 10: The price stood at Rs 2,883 per quintal.
This represents a 5.3 per cent increase in just over three weeks. Furthermore, the Wholesale Price Index (WPI) for broken rice showed year-on-year inflation rising to 5.38 per cent in September 2026, up from 4.37 per cent in August, signaling growing inflationary pressure.
The Ethanol Connection: A New Competition
It isn't just international buyers driving the price up. Broken rice has evolved into a critical industrial raw material. Vinod Kaul, Director General of IREF, highlighted that the grain is now heavily sought after for ethanol manufacturing and poultry feed.
India's ambitious ethanol-blending programme has significantly increased the need for grain-based feedstocks. While the government allows the use of surplus rice from the Food Corporation of India (FCI), commercial distilleries are also buying from the open market. This has created a fierce competition for raw materials between exporters, poultry-feed producers, and ethanol plants.
"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," said Vinod Kaul.
Historical Context and Production Paradox
This is not the first time the industry has faced such hurdles. In September 2022, the government prohibited broken rice exports due to availability concerns, a ban that lasted until March 7, 2025. While exports were eventually restored under the free category, the current price volatility suggests a return to those restrictive measures could be imminent.
Interestingly, this threat emerges despite record-breaking production. India's overall rice production is estimated at 154.02 million tonnes for 2025-26, surpassing the 150.18 million tonnes of the previous year. However, the IREF cautions that high overall production does not automatically translate to a sufficient supply of 100 per cent broken rice.
Advice to Exporters
With India having exported approximately 21.57 million tonnes of rice during 2025-26, the stakes are high. The IREF has urged exporters to be extremely cautious when entering into forward contracts. They are advised to keep a close watch on:
- Domestic price fluctuations.
- Milling arrivals.
- Demand shifts within the ethanol sector.
The Federation has also appealed to the government to maintain a dialogue with industry stakeholders before implementing any new restrictions, requesting fair transition periods for existing letters of credit and committed shipments.