Export of Rice
BOOK A FREE CONSULTATION
Get help from an experienced legal adviser. Schedule your consultation at a time that works for you and it's absolutely FREE.
India is famous for its rice cultivation all over the world. India is the largest exporter of rice with a 28.9% market share from world exports (2016). Produced an export value of 5315.535 Million USD in 2016. In the list of countries that export rice, India is followed by Thailand, which ranks second on the list. India is a country that is engaged in exporting rice to more than 150 countries worldwide. The export of rice from India is done in three stages namely Basmati, Non-Basmati, and others. India registered 226.61 Million USD exports from Basmati rice for export under HS code 10063020 in March 2017 while the export value of non-basmati rice is 93.52 Million USD. The Indian government has kept a very competitive price of imported rice to increase exports of rice from India.
Many countries request Rice Export certificates from importing countries such as India. These certificates are important in maintaining the quality of imported rice and in protecting it from any improper act. A few of them are listed below
Phytosanitary certificate or PSC
Phytosanitary Certification (PSC) is an official document, required by the exporting country, which ensures that agricultural products or crops that are exported are free of pesticides. This certificate is issued at a thorough inspection and is required in importing countries. The consignment is deemed to be exported only if it complies with the current practice of health food certification in the importing country
Similar to other countries, there are standard procedures for exporting rice from India to the USA as well. The USA brought the news of the confinement of loads of rice on the basis of the discovery of the Khapra beetle, also known as the Trogoderma granarium. The main reason for this concern is that the Khapra beetle is in serious economic danger in the USA. This rule is valid even if the beetles / dead skin of beetles are found.
A Phytosanitary Certificate (PSC) must be obtained for each consignment prior to exporting rice to the USA via the PQIS online system. This certificate can be obtained by applying to the informed PSC issuing authority. This will be done through registered milling and/or processing units. Also, a trader who has obtained rice for export from registered milling or processing units will apply for this certificate.
Certificate of Authenticity of European Union countries
A Certificate of Authenticity is issued by EIC / EIAs appointed by the Government of India for this work. This was done for Basmati Rice shipments shipped from India to European Union countries. This is done in accordance with EC guidelines to allow for a reduction in import tax benefits.
Obtaining these certificate documents such as an affidavit, invoice, etc. The load will then be checked and checked. Accordingly, the EIA will certify a Certificate of Authenticity.
The EIA verification methods for issuing a certificate of authenticity are -
- Quantity / Packing
- FOB value
- Agricultural District
- The guarantee that the exported rice is Basmati rice
- Description (Basmati rice grade)
The validity of this certificate is 90 days. When a certificate of authenticity expires, it must be renewed.
Permit to import and remove the Islamic Republic of Iran
The importation of rice to Iran has been tested in accordance with certain regulatory requirements. If any exporter from India desires to export of rice in Iran, the exporter will be required to submit rice samples for testing. This sample must be from the consignment and must be provided with the APEDA approved/approved laboratory for testing.
For a specific application fee, an application must be submitted to APEDA for a certificate. After that, APEDA issues a certificate on the basis of testing. In the case of basmati rice exports, APEDA will register export contracts in accordance with the trade notice.
Hazard Critical Control Point Analysis or HACCP
HACCP validation is about focusing on testing the process of food production and distribution rather than the finished product. This type of strategy protects food products from chemical, physical and bacterial contamination. It is an internationally accepted method that demonstrates a product's commitment to food safety. This certification helps consumers to trust the manufacturer, distributor and seller of a particular food product.
Audits are performed by nutritionists to determine where risks are likely to occur (in the production process) so that action can be taken as soon as possible. The biggest benefit of the HACCP certificate is its potential to improve the sale of certified products in global markets.
Food and Drug Administration or the United States FDA
This administration or agency is responsible for protecting the health of the American public by testing certain foods, drugs, cosmetics and radiation products. Products are not only tested after they reach the market, but other products are tested after they are already on the market. For any product to reach the U.S. indoor market, it must be certified by the FDA.
SGS or Society General de Surveillance (French)
SGS is an international testing and certification body that works to improve the quality of food that is distributed, re-sold or imported and to reduce the risk of potential hazards. This certificate provides a much-needed guarantee to buyers and sellers. This certificate strengthens the trust and confidence in the seller.
If SGS is selected for testing, the costs must be borne by the buyer or seller. This depends on the agreement between the two. Upon obtaining an SGS certificate, inspections of production methods and structures are performed annually.
Genetic or Non-GMO Fertility
This certificate is issued by a third party witness confirming that the manufacturer provided the product is not genetically modified so that consumers can be assured that what they are getting into their body is healthy. This certification program is designed for quality control and testing of GMO production status. This certificate enhances customers' confidence in the product and makes them less anxious about what they eat.
British Retail Consortium or BRC of the United Kingdom
The BRC is a global standard for hygiene, food security and quality programs. This certificate is a testament to one's commitment to consumer safety. SGS has a global network and provides certification testing everywhere in the world. BRC is a standard approach recognized by the Global Food Safety Initiative (GFSI). This standard ensures that products are safe and legal that meet quality requirements.
It is the leading commercial organization for resale in the United Kingdom. It adheres to the principles of ISO 9000 which include building and equipment maintenance, cleaning, pest control, waste management, allergen management, product packaging, product testing and testing and setting staff training standards and personal hygiene.
India is facing stiff competition in the global rice export markets. Besides, there are many domestic problems for rice sellers abroad. If these internal problems are loosened as much as possible, exporters can find an easy way to improve rice exports and those measures will be very helpful in financing exports. Some of the major issues are discussed in the chapter below:
- According to the Govt. province policy, various taxes levied on the sale of rice, such as provinces impose a purchase tax (by indirect shipment), Market Fees, Rural Development Fund, Administrative Fees etc. This tax provides the price of rice globally competitively. As a result, Indian rice is becoming more expensive in the global market.
- Due to the increase in the cost of inputs used to cultivate paddy, production costs increase and the Minimum Support Price (MSP) for paddy is improved annually by govt. of India to protect the interests of farmers. When paddy is converted into rice, it becomes more expensive and thus makes it less competitive globally.
- Rice production intended for export is subsidized, which reduces production costs and thus reduces the cost of rice. Therefore, the export price of rice from those countries is highly competitive in international markets compared to Indian rice.
- Rice mills have not been fully modernized to ensure high quality grinding and reduce the percentage of broken rice. Typical rice mills have a Rubber Roll Sheller where the percentage of broken rice is higher than modern rice mills under Runner Sheller. Thus, head rice obtained from the milling of conventional mills becomes costly due to the high percentage of broken rice.
- Lack of proper preparation for the production of the sufficient amount of seed required for rice cultivation for export purposes.
- Exports are also plagued by competition from exporting countries such as Thailand, Vietnam and Pakistan because production costs in these competing countries are low compared to production costs in India. Infect, part of the trade believes Indian rice could face global competition.
- Nowadays basmati rice is facing a problem with the smell, because the intensity of the odour in traditional basmati varieties is not as high as in the past.
- In the absence of pure genetic seeds of basmati varieties, most basmati rice fields, crop height variation, grain size and yield ripening are available. This is one of the main reasons for the poor quality of basmati rice. Affected, during the processing of rice the size of the grain can be taken care of, but it is a waste. However, using the right quality seed for loss can be turned into a benefit.