Global Rice News

UK Rice Millers Fear Future as UK-India Free Trade Agreement Approaches

The UK rice industry, worth £1 billion ($1.2 billion), is concerned about its future as negotiations for a free trade agreement between Britain and India progress. British rice millers, including Tilda and Veetee Rice, have thrived by importing low-tariff unmilled brown rice from India and Pakistan, polishing it to create the white rice that UK consumers prefer. However, India is pushing for reduced tariffs on white rice, leading to mounting anxieties within the industry.

At a recent private event attended by rice industry leaders and government officials, Alex Waugh, the outgoing director of The Rice Association, emphasized the importance of maintaining existing tariffs on milled white rice. Waugh stated that if access to milled rice is compromised, it would undermine operations, discourage future investment, and result in job losses.

The UK Department for Business and Trade has stated that officials are working towards a fair and ambitious trade deal. However, discussions regarding tariffs on rice have yet to be fully addressed, indicating that there are still obstacles to overcome.

The current situation sees the UK importing significant quantities of brown rice from India, with roughly 150,000 metric tons originating from the country, accounting for a quarter of its total rice imports. Import tariffs currently make this import cost-effective. The tariff on brown basmati rice stands at £25 per ton, or zero if it falls within a list of special varieties. This is significantly lower than the tariff on white basmati rice, which amounts to approximately £121 per ton.

If the tariff on white rice is reduced, it would render UK mills obsolete, according to industry leaders. They argue that the negligible price benefits for consumers would threaten supply security and potentially lead to a decrease in quality. Waugh also argues that India would not gain much from lower UK tariffs, as UK mills already offer higher prices to farmers for their brown rice due to the need for pesticide compliance and a growing preference for rice with improved sustainability credentials.

Additionally, the impact on Indian millers would be minimal, as the quantities of milled rice exported to the UK are not significant enough to significantly affect their profits.

The implications of reduced tariffs extend beyond job losses and production declines. The UK would become more reliant on rice imports, potentially compromising food security.

Source: [ET Retail](https://retail.economictimes.indiatimes.com)