De-oiled Rice Bran (DORB) is an essential, yet often overlooked, component of India’s animal feed industry. Its rich profile of protein, fiber, and energy makes it invaluable for cattle, poultry, and aquaculture feed formulations. However, the Indian DORB market experienced a dramatic shift following a major government policy change in July 2023—a move whose reverberations continue to impact the entire sector.
Backdrop: DORB and Its Role in Indian Animal Feed
India is a global heavyweight in rice production, yielding approximately 5.5 million tonnes of DORB annually as a byproduct of the oil extraction process. Of this, about 10-12% was traditionally exported, with Vietnam being a top destination. DORB had solidified its place as a cost-effective, nutrient-rich feed ingredient, supporting the dietary needs of livestock across India.
The Policy Shock: Export Ban Announcement
The game-changer came on July 28, 2023, when the Directorate General of Foreign Trade (DGFT) issued a sudden ban on DORB exports. The stated rationale? To control rising domestic milk prices, which the government attributed, in part, to increasing fodder costs—DORB being a substantial feed component for dairy cattle. The hope was clear: increased DORB supply at home would bring down its cost, thus relieving upward pressure on milk prices.
The ban, initially described as a temporary intervention, has since been extended multiple times and is scheduled to remain in place until at least September 30, 2025.
Immediate and Sweeping Market Impact
The export ban triggered instant changes:
Domestic Price Crash: DORB prices plummeted from pre-ban highs of ₹18,000-18,500 per tonne to ₹13,500 per tonne by late 2023, even lower around ₹7500 per tonne by March 2025.
Surging Domestic Supply: With exports halted, the 500,000-600,000 tonnes previously shipped abroad flowed into the domestic feed market, making DORB cheaper and more plentiful for Indian buyers.
Shifting Consumption Patterns: Cheaper DORB became a more attractive feed ingredient, especially in cost-sensitive poultry and aquaculture sectors, leading to higher inclusion rates in feed formulations.
Competitive Edge Over Substitutes: DORB’s lower price versus substitutes like soybean meal and maize led to a shift in feed manufacturing, with DORB increasingly preferred where possible.
Did It Achieve Its Stated Goal?
Ironically, the primary purpose of the export ban—arresting milk price inflation—remains unfulfilled according to many industry observers. The Solvent Extractors’ Association of India (SEA) and other stakeholders questioned the move’s effectiveness, pointing out that DORB constitutes only about 25% of cattle feed composition. As such, its price drop delivered only a marginal (estimated at less than 1%) downward effect on retail milk prices. In reality, milk prices remained elevated or even continued to rise during the period, influenced by other cost drivers and broader inflationary trends.
Unintended Consequences and Industry Concerns
While feed manufacturers and livestock farmers outside Eastern India welcomed the cheaper DORB, the ban created significant economic hardship for processors and exporters—particularly in states like West Bengal, a major DORB producer with relatively low local feed demand. Without export outlets, these processors faced mounting stockpiles, operational scale-backs, and reduced revenue, with ripple effects throughout the local rice milling ecosystem. The high cost of domestic logistics made it uneconomical to move surplus DORB from East to feed-deficit regions in the West and South, further exacerbating the disparity.
The ban also impacted India’s international trade reputation. Suddenly exiting export markets raised questions about India’s reliability as a supplier, making it harder to regain lost buyers in the future.
Policy Extensions and Current Status
The temporary measure has become a long-standing intervention, with successive extensions stretching the export prohibition to September 2025. There is still little certainty about when, or if, exports will be allowed to resume—and under what terms.
What Lies Ahead? Future Outlook Scenarios
The future of the Indian DORB market remains closely tied to government policy:
If the ban continues:
Domestic prices should stay suppressed.
Domestic consumption will likely remain high, especially in cost-sensitive feed sectors.
Exporters—especially in surplus regions—will continue to face hardship and risk long-term loss of export markets.
If exports resume:
DORB prices are expected to rise toward international parity.
Feed manufacturers may revert to alternative formulations, reducing DORB inclusion.
India will need to rebuild trust and market share internationally—no small feat after a prolonged absence.
Long-term influences such as the growth of India’s dairy, poultry, and aquaculture sectors, technological advancements in feed formulation, and stable, predictable policy will be crucial for market stability.
Conclusion
The DORB export ban stands as a textbook example of how a single policy shift can fundamentally reshape an entire supply chain. While the move brought short-term cost relief for some domestic buyers, it failed to effectively control milk price inflation and imposed significant burdens on processors, exporters, and regional economies. The experience underscores the need for well-considered, data-driven policymaking that balances the interests of all stakeholders, ensures value chain efficiency, and upholds India’s standing as a reliable partner in global agricultural trade.
By staying alert to policy changes and advocating for long-term, predictable frameworks, all stakeholders—from feed manufacturers to farmers—can better navigate the evolving DORB landscape.
Very well articulated content showing concerns of the manufacturers and the lost purpose of dorb ban in milk prices...
ReplyDeleteThankyou Manikiran ji for your acknowledgment.
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