To curb the high prices in the country, India has banned the export of white rice with immediate effect. The action by the world’s largest exporter could further exacerbate global food inflation.
Effective immediately, India has imposed an export ban on its largest rice variety, fueling new fears in the global food market. “In order to ensure adequate availability of non-basmati white rice in the Indian market and mitigate the price increase in the domestic market, the Indian government has changed the export policy,” the Food Ministry wrote in a statement.
The government points to an 11.5 percent increase in retail prices in the past twelve months alone. Heavy monsoon rains had caused considerable damage, especially in the north of the country, and thus weak crop yields. The ban should apply immediately. However, ships that have just been loaded should still be approved for export.
Rice prices already at their highest level in eleven years
With a share of more than 40 percent, India is the largest rice exporter in the world. According to official figures, a quarter of usual exports remain in the country. According to Reuters, however, deliveries are likely to almost halve. The affected varieties, white non-Basmati rice and broken rice, would have accounted for around ten million tons of the total of 22 million tons of Indian rice exports in 2022. A ban on broken rice exports was imposed in September.
Rice is a staple food for more than three billion people. Almost 90 percent of water-intensive grain is grown in Asia. World market prices are already at their highest level in eleven years. The partial loss of Indian exports and the low inventories of other suppliers are now likely to exacerbate the development even further.
This could also push global food prices higher overall, which have risen sharply due to the Russian attack on Ukraine and weather conditions. “India would disrupt the global rice market at a far greater rate than Ukraine did with Russia’s invasion of the wheat market,” BV Krishna Rao, president of the Rice Exporters Association, told Reuters.