India Bans Rice Exports, Risks Rising Global Prices

New Delhi, July 22 (TNA) India, the world's largest rice exporter, has imposed an immediate ban on some overseas sales of non-basmati white rice, accounting for a quarter of its total production. The move aims to ensure sufficient domestic availability and mitigate the surge in international rice prices amidst global challenges like the Covid pandemic, the Ukrainian war, and El Nino's impact on production levels.

International rice prices have soared to decade highs, posing risks to food security in countries heavily reliant on rice imports. African nations, Turkey, Syria, and Pakistan, already grappling with high food-price inflation, are expected to be adversely affected by the ban.

India accounts for over 40 percent of all global rice shipments, and the ban could exacerbate the strain on rice-import-dependent countries. Indian exports of non-basmati white rice had risen by 35 percent year-on-year in the second quarter, despite previous measures such as banning broken rice shipments and imposing a 20 percent export tax on white rice.

The ban might create a shortage in the international market, as alternative major exporters like Thailand, Vietnam, Pakistan, and the US lack the spare capacity to fill the gap. This situation could further contribute to inflation worldwide, as rice can be used as a substitute for wheat.

Rice prices in India had already risen by 14-15 percent in the past year, leading the government to take action from a domestic food security and inflation perspective. Last year, India had also limited wheat and sugar exports to control prices.

With the ban in effect, there are concerns about the potential impact on global rice prices, which could add to existing challenges in the wake of the ongoing pandemic and geopolitical crises.