- India bans non-basmati white rice exports to curb domestic price increases
- Global food prices may be impacted, warns investment director
- Move comes amid concerns of production shortfall and rising food prices in India
India has prohibited the export of white rice that is not basmati to prevent impending domestic price increases.
In the past year, rice prices have increased by more than 11 percent as a result of damage to crops caused by heavy rainfall.
Approximately a quarter of India’s rice exports presently consist of non-basmati white grain, the Ministry of Consumer Affairs stated when announcing the policy change.
Experts cautioned that the action could increase global food prices.
Emma Wall, director of investment analysis and research at Hargreaves Lansdown, stated, “It’s safe to say this will have a significant impact on global food prices.”
After Russia’s withdrawal this week from an agreement assuring the safe passage of Ukrainian grain, including wheat, food supplies are already under strain.
India is the largest exporter of rice in the world, accounting for over 40 percent of global shipments. Non-basmati rice is primarily exported to Asian and African nations.
To discourage foreign sales, the Indian government imposed a 20% export tax one year ago. It has also restricted shipments of wheat and sugar.
However, exporting can be more profitable for Indian producers than domestic sales.
The government stated that producers would continue to be able to export other types of rice, such as long-grain basmati, ensuring that they “enjoy profitable prices on the international market.”
According to the Directorate General of Foreign Trade, the state will also evaluate requests to allow shipments to other countries based on food security requirements.
The invasion of Ukraine in 2014 caused an increase in global food prices.
While these pressures have since abated on a global scale, in India, severe weather has damaged agriculture in many northern states, causing the prices of many goods, including tomatoes and onions, to soar.
The 12 percent increase in vegetable prices from May to June contributed to the rising cost of living. Inflation increased to 4.8% last month, which was higher than anticipated due to rising food prices.
In India, the rising cost of living has exerted political pressure on the government in advance of next year’s national elections. In the following months, there will also be elections on the state level.
An expert in agriculture policy in India, Devinder Sharma, stated that the government was attempting to get ahead of an anticipated production shortfall, with rice-growing regions in the south being vulnerable to the risk of dry rain as El Nino weather pattern moves through later this year.
He stated, “The government is taking an extremely cautious approach.”
