The world’s biggest rice exporter, India, has banned some overseas sales of the grain “with immediate effect,” the government said, in a move that could drive international prices even higher.
Rice is a major world food staple and prices on international markets have soared to decade highs as the world grappled with the COVID-19 pandemic, the war in Ukraine and the impact of the El Nino weather phenomenon on production levels.
India would ban exports of non-basmati white rice — which accounts for about one-quarter of its total, the Indian Ministry of Consumer Affairs, Food and Public Distribution said.
Photo: Reuters
The move would “ensure adequate availability” and “allay the rise in prices in the domestic market,” it said in a statement late on Thursday.
Heavy rain in northern parts of India over the past few weeks has damaged newly planted crops in states including Punjab and Haryana, and many farmers have had to replant.
Rice paddy fields in northern states have been submerged for more than a week, destroying newly planted seedlings, and forcing farmers to wait for waters to recede so they can replant.
In other major rice-growing states, farmers have prepared paddy nurseries, but have been unable to transplant the seedlings due to inadequate rainfall.
India accounts for more than 40 percent of all global rice shipments, so the decision could “risk exacerbating food insecurity in countries highly dependent on rice imports,” data analytics firm Gro Intelligence said in a note.
Countries expected to be hit by the ban include African nations, Turkey, Syria and Pakistan — all of them already struggling with high food-price inflation, the firm added.
Global demand saw Indian exports of non-basmati white rice jump 35 percent year-on-year in the second quarter, the ministry said.
The increase came even after the government banned broken rice shipments and imposed a 20 percent export tax on white rice in September last year.
India exported 10.3 million tonnes of non-basmati white rice last year and Rabobank senior analyst Oscar Tjakra said alternative suppliers did not have spare capacity to fill the gap.
“Typically the major exporters are Thailand, Vietnam, and to some extent Pakistan and the US,” he said. “They won’t have enough supply of rice to replace these.”
Moscow’s cancelation of the Black Sea grain deal that protected Ukrainian exports has already led to wheat prices creeping up, he added.
“Obviously this will add into inflation around the world because rice can be used as a substitute for wheat,” he said.
Rice prices in India rose 14 to 15 percent in the year to March and the government “clearly viewed these as red lines from a domestic food security and inflation point of view,” ratings agency Crisil’s research director Pushan Sharma said in a note.
Additional reporting by Reuters
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