India may reintroduce broken rice export restrictions amid rising demand from ethanol producers

India is considering reintroducing restrictions on exports of 100% broken white rice amid rising domestic prices and stronger demand from ethanol producers and the animal feed industry. According to market participants, exporters held talks with the government on November 4, during which potential export restrictions were discussed. The previous ban on broken rice exports was in effect from September 2022 until March 7, 2025.

Export prices for Indian broken rice continue to rise amid tightening supplies and increasing competition for raw materials. As of November 5, the price stood at $336/t FOB Kakinada, up 5% month-on-month and 5.32% year-on-year. According to market participants, some international price offers exceed $360/t. Meanwhile, grain procurement prices for poultry feed have already surpassed 34,000 rupees/t in southern India, while reaching around 30,000 rupees/t in Bihar and 31,000–32,000 rupees/t in Punjab.

Additional pressure on the domestic market is coming from ethanol producers. India requires approximately 11 bln liters of ethanol in the current season to implement its biofuel program. Meanwhile, the state-run Food Corporation of India plans to supply no more than 7.2 mln tons of rice to ethanol manufacturers. According to market participants, limited supplies of government-held rice are intensifying competition among biofuel producers, feed manufacturers and exporters for available broken rice volumes.

The situation is further complicated by an expected decline in India’s rice production. According to S&P Global Energy CERA, the 2026/27 marketing year harvest could fall by 8 mln tons from the previous season to 146 mln tons. Production has been negatively affected by drought in southern regions, El Niño-related weather conditions, Cyclone Arnab and unseasonal rainfall in Chhattisgarh. Lower production combined with strong domestic demand increases the risk of further price increases.

The possible reintroduction of export restrictions could reduce Indian broken rice availability on the global market and alter trade flows, particularly in the feed ingredient segment. However, some exporters believe a new ban would be premature, arguing that domestic rice stocks remain sufficient to meet the ethanol industry’s needs. The government has not yet announced a final decision, and market participants are awaiting official updates on potential changes to export policy.

Tags: rice, India