IREF, the body that represents Indian rice exporters, said on November 3 that India may reintroduce restrictions on exports of 100% broken rice after international prices crossed $360 a tonne1. The federation said no fresh restriction has been announced1.

Broken rice is the fragments left after milling. It is a cheap carbohydrate input for poultry feed and food processing, and now also for ethanol1.

Domestic prices show the pressure. The all-India average wholesale price of broken rice rose 5.3% to Rs 3,036 per quintal on November 2, from Rs 2,883 on October 10, Department of Consumer Affairs data show1. A quintal is 100 kg. Wholesale price inflation for broken rice accelerated to 5.38% year on year in September from 4.37% in August1.

Ethanol is bidding for the same grain

India's overall rice balance still looks comfortable. Production is estimated at a record 154.02 million tonnes in 2025-26, and the country exported about 21.57 million tonnes of rice in the fiscal year1.

The tightness sits in one grade. Broken rice, generated during milling, has its own supply and demand pattern and faces competing users at home and abroad, IREF said1.

Ethanol distilleries are the newest competitor. In the tender for the 2026-27 supply year issued on October 16, BPCL sought about 11 billion litres of ethanol on behalf of the oil marketing companies3. Offers were sought for maize, broken rice, FCI surplus rice and C-heavy molasses, but not for sugarcane juice, sugar syrup or B-heavy molasses3. The tender also cut the maize ethanol price to Rs 68.86 per litre from Rs 71.863.

Distilleries have increasingly turned to damaged grain, which has raised worries about animal feed availability, said CK Jain, president of the Grain Ethanol Manufacturers Association4. Poultry associations have asked for duty-free imports of non-GMO maize and for FCI grain unfit for human consumption to be released for feed5.

Elections add to the pressure. Assembly polls are due in Uttar Pradesh, Punjab, Uttarakhand, Goa and Manipur in 2027, IREF noted1.

Physical prices are firm, futures are hotter

Global rice prices are near a two-year high. Export offers are up $20 a tonne from India and Pakistan and $30 from Thailand and Vietnam since July2. The FAO All Rice Price Index rose 1.4% in September6.

Futures have moved further than physical trade. CBOT second-month rough rice reached a 29-month high of $17.8 per hundredweight in October2. BMI, a unit of Fitch Solutions, said it did not believe the strength in futures signalled a comparable deterioration in physical markets2. Futures were pricing a much larger supply-risk premium than export prices currently show, it said2. IREF did not say which grade or quote basis the $360 a tonne figure refers to1.

Other gauges are softer. The World Bank's agricultural price index fell 1.3% in October, led by a 1.8% drop in food prices7. BMI raised its 2026 average forecast for CBOT second-month rice to $14 per hundredweight from $12.92.

Forecasts still point to a tighter 2026-27 season. AMIS, the FAO-led market information system, sees world production down 2.4% at 552.47 million tonnes2. USDA puts Indian output at 147 million tonnes for 2026-27, down 4.6% year on year, while India's own 2025-26 estimate is the record 154.02 million tonnes1, 2. ING and Rabobank both said El Nino poses risks to South and South-East Asian rice through the fourth quarter and the first quarter of 20272.

What a restriction would cost buyers

India has used this tool before. It prohibited broken rice exports in September 2022 and restored them under the free category on March 7, 20251.

IREF has asked the government to consult stakeholders before any new restriction and to give transition arrangements that protect existing contracts, letters of credit and committed shipments1.

"If this trend continues, the possibility of restrictions on broken rice exports cannot be ruled out," said Vinod Kaul, IREF's director general1. "Predictable policies and protection of existing commitments are essential to maintaining India's credibility as a dependable global rice supplier," he said1.

Food manufacturers are already adjusting. Kellogg's has reformulated UK Rice Krispies to use rice flour instead of rice grains, and Coco Pops to a blend of rice flour and corn flour8, 9. The company blamed changing weather conditions that affect the quality and availability of rice and grains9. The recipes in the US and Canada keep real rice9. Because the new UK recipes contain wheat gluten, they are no longer suitable for people with coeliac disease or a wheat allergy8.

What to watch

  • Any change would come as a government notification, and IREF said on November 3 that none had been announced1.
  • The ethanol blending rate. GK Sood, chairman of KN Agri Resources, expects blending to fall to around 15% this supply year from 20%4. If that happens, distilleries would buy less grain.
  • Maize supply. Industry estimates see corn output falling by as much as 15% from the record 55 million tonnes4, while distilleries can bid either maize or broken rice into the tender3.
  • State elections in 2027, which IREF says raise the political cost of food inflation1.