Cabinet approves export of 10 lakh tonnes of rice to Indonesia, NCEL to procure rice from open market

The Government of India has approved the proposal to enter into an agreement for the export of 10 lakh tonnes of non-basmati rice to Indonesia. This decision was taken in the meeting of the Cabinet Committee on Economic Affairs (CCEA) on Wednesday. Under this decision, an agreement (MoU) will be signed between the Ministry of Cooperation of the Government of India and the Ministry of Trade of the Indonesian Government for the export of 10 lakh tonnes of non-basmati rice. 

According to information received from sources, the responsibility of export on behalf of the Ministry of Cooperation will be of National Cooperative Export Limited (NCEL), while the responsibility of rice import on behalf of the Ministry of Trade of Indonesia has been given to the national procurement agency BULOG. Even during the ban on rice export, the Government of India exported rice to friendly countries under the permit system through NCEL. It is one of the three new cooperative societies formed at the national level. NCEL will work on commercial terms for rice export and its purchase will be done from the open market. 

It is noteworthy that for the export of 10 lakh tonnes of non-basmati rice to Indonesia, NCEL will purchase rice from the open market instead of the central government's buffer stock. The Government of India banned the export of non-basmati white rice in July 2023 in view of rising rice prices. This ban was lifted in September 2024, but a minimum export price (MEP) of $490 per tonne was imposed. Eventually, all restrictions on rice exports were lifted in October. 

This move by India, the world's largest rice exporter, led to a fall in rice prices by more than 10 per cent in the global market. However, prices have improved after November. This year, due to good monsoon, India got a bumper yield of paddy. In the Kharif season 2024-25, rice production in the country is estimated to reach a record level of 11.99 crore tonnes. Whereas in the Kharif season 2023-24, rice production had reached 11.32 crore tonnes. At present, there is sufficient buffer stock of rice in government warehouses, and retail prices are also under control. In such a situation, exporting 10 lakh tonnes of non-basmati rice to Indonesia is good news for the country's agriculture export and rice trade.  

Lower Rice production in Indonesia

Rural Voice reported on October 29 that Indonesia is considering importing up to 10 lakh tonnes of rice from India in 2025 due to delayed harvests. The proposed import aims to address anticipated low output in early 2025, caused by delays in planting and harvesting seasons driven by prolonged dry weather. Indonesia's rice production in 2024 is projected to decline by 2.43% compared to the previous year.

Indonesia's state procurement agency, BULOG, has signalled an expanded sourcing strategy. Initially, BULOG’s tender to purchase 340,000 tonnes of rice permitted supplies only from Thailand, Cambodia, Vietnam, or Pakistan. However, it later allowed Indian-origin rice to be included.

Indonesia's national rice production has been declining over the past five years. Rice imports have significantly increased in the last two years, exceeding 3 million tonnes annually. This year, Indonesia is targeting rice imports of up to 3.6 million tonnes.

Indonesia plans to import 1 million tons of rice from India as harvest delays