The Indian government has banned exports of broken rice with effect from Sept. 9, according to a notification from Directorate General of Foreign Trade, amid higher food inflation in recent months and lower rice cultivation area on the year due to deficient showers.

The recent move comes right after India imposed a 20% export duty on several varieties of rice on Sept. 8.

"Export Policy of broken rice is amended from 'free' to 'prohibited,'" the notification read.

However, the government has given some exemptions till Sept. 15.

According to the notification, exports could continue if cargoes had started to load before the notification or if the rice consignment had been handed over to customs.

The government will also approve exports under contracts where vessels have berthed in Indian ports, the notification said.

However, some in trade circles are concerned about the impact on orders placed for future shipments.

As it appears now, ships that have arrived at Indian ports and received loading might be able to ship, but concerns remain over future trade, a trader based in Singapore said.

One supplier told S&P Global Commodity Insights that "every exporter is looking to cover their exposure today" and that there were "no quotes as of today." Traders confirmed that they were struggling to receive quotations amid the uncertainty and upheaval.

According to data from the agriculture ministry, Indian farmers have planted kharif paddy across 38.4 million hectares so far in the crop year 2022-23 (July-June), down 6% on the year.

India accounts for 40% of the global rice trade, with sales of 5% and 25% broken white rice accounting for a significant portion of exports.

In the marketing year 2021-22 (April-March), India had shipped 3.89 million mt of broken rice. During April-June 2022, it exported 1.8 million mt.

Platts Indian 100% broken white rice assessment hovered at $320/mt FOB Sept. 8. Platts assessed equivalent 5% broken white rice products in Thailand and Vietnam -- the world's second and third-largest rice exporters -- at premiums of $46/mt and $49/mt, respectively.

The policy change has become significant, as India has been facing weather vagaries over the past few months. India banned exports of wheat in May and wheat products like refined flour and whole wheat flour in August amid rising domestic prices as output declined due to severe heat waves.