Lagatar24 Desk
New Delhi, July 21: India, the largest exporter of rice in the world, has announced a restriction on some international sales of the crop “with immediate effect,” the government said, which could cause international prices to rise even further.
As the world struggled with the Covid outbreak, the war in Ukraine and the effect of the El Nino weather phenomena on production levels, rice prices on international markets skyrocketed to decade highs.
India will prohibit the export of non-basmati white rice, which makes up around 25% of its entire production, the consumer affairs and food ministry stated.
The action will “ensure adequate availability” and “allay the rise in prices in the domestic market”, a statement said, released late on Thursday.
India is responsible for more than 40% of all global rice shipments, so the decision could “risk exacerbating food insecurity in countries highly dependent on rice imports”, according to data analytics company Gro Intelligence.
African nations, Turkey, Syria and Pakistan are among the nations that the prohibition is anticipated to affect; all of these nations are already dealing with severe food price inflation, the company noted.
Non-basmati white rice exports from India increased 35% year over year in the second quarter due to increased global demand, the ministry stated.
The growth happened despite the government’s September ban on broken rice shipments and the imposition of a 20 per cent export tax on white rice.
Last year, India exported 10.3 million tonnes of non-basmati white rice, and senior analyst at Rabobank, Oscar Tjakra claimed that substitute suppliers lacked the capacity to make up the shortfall.
“Typically the major exporters are Thailand, Vietnam, and to some extent Pakistan and the US,” he told AFP. “They won’t have enough supply of rice to replace these.”
Wheat prices have already begun to rise as a result of Moscow’s withdrawal from the Black Sea grain agreement that protected Ukrainian exports, he noted. “Obviously, this will add to inflation around the world because rice can be used as a substitute for wheat.”
In March, rice prices in India increased 14–15%, and the government “clearly viewed these as red lines from a domestic food security and inflation point of view,” Pushan Sharma, research director at ratings agency Crisil said in a note.
India had already reduced its sugar and wheat exports last year to keep prices in check.
