India has banned the export of two million tonnes of rice to fight rampant inflation and protect its domestic supply after Russia cancelled a UN-backed deal allowing Ukraine to ship its grain worldwide. But some fear the move could help drive up food prices elsewhere.
India, the world’s largest exporter of rice, banned shipments of non-basmati white rice, which accounts for a quarter of Indian exports, on 20 July. It was a bid to calm local prices, which have risen 11.5 percent in a year and 3 percent since June.
“The prohibition on export of non-basmati white rice will lead to lowering of prices for the consumers in the country,” the Indian government said.
In a statement announcing the ban, the ministry of food and consumer affairs said extreme weather in other rice-producing countries had driven other nations to import more of India's supply.
Without naming its long-time ally Russia, the government also blamed Moscow’s withdrawal from the global grain deal for the rising demand for staple foods.
“This sharp increase in exports can be ascribed to high international prices due to the geopolitical scenario,” the ministry said.
The ruling BJP party is determined to keep food inflation under check in India, where vegetable prices in particular have soared.
Tomatoes alone cost nearly 300 percent more than last year, prompting local franchises of McDonald's and Subway fast-food restaurants to drop them from their menu.
Global impact
Some experts say the ban may help local rates fall, but will push up global food prices.
Before the ban, India sold 500,000 tonnes of non-basmati white rice each month, according to news agency Reuters.
Traders said overseas orders worth €1.26 billion would be scrapped because of the move, which caused rice prices from other Asian countries to soar in the global market.
Prices for wheat and corn are also on the rise after the collapse of the Black Sea grain deal. The accord expired on 17 July, ending safe passage for cargo ships carrying Ukrainian food exports to global markets.
Ukraine warned the move would jack up food prices and people in Africa and Asia would suffer the most.
Scramble for rice
Videos and photographs on social media showed Indians overseas stocking up on rice.
Indian-run grocery stores in the US and Canada, both home to large populations of Indian immigrants, saw anxious expatriates scrambling for bags of rice.
Some shops enforced rationing amid complaints of hoarding and black-market trading.
Only 1 bag per family':
— Gaurav kochar (@gaurav_kochar) July 24, 2023
Telugu NRIs in US severely
hit after India bans non-
basmati #rice #exporthttps://t.co/pjCqkzbNQD pic.twitter.com/iTJNU7IGjR
Salam Hasan, general manager of Iqbal Halal Food Stores in the Canadian city of Mississauga near Toronto, said buyers stripped his supply of rice in record time.
“There was stock for three to four weeks which sold in a couple of days,” Hasan told local news website CityNews.
The Times of India reported that in some parts of the US, 9 kg bags of rice were selling for $27, or around €25.
Export giant
India accounts for 40 percent of world rice exports.
Last September, India slapped a 20 percent duty on rice exports to slow foreign demand. But as countries across the world grappled with disrupted production due to bad weather, demand for Indian rice continued to rise.
While India's rice output from crops sown last summer was forecast to fall 6 percent, wholesale traders in India said they were banking on the October-November harvest to even out the supply.
Some grain traders predicted the ban would not impact consumers at home and may only encourage them to turn to cheaper varieties of rice.
