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India’s ban on non-basmati white rice exports

Maryam Kalif


Source: Reuters

On July 20, 2023, India announced that, effective immediately, all non-basmati white rice exports would be halted. This ban came after the onslaught of late monsoon rains over Indian rice crops, causing significant damage to the harvest. India’s rice ban was announced three days after the Russian government rejected a deal that would allow Ukraine to export grain, another blow to the growing issues surrounding the global food market.

India is the world’s biggest rice exporter, accounting for approximately 40 per cent of the world’s rice export. The banned export category includes broken rice and non-basmati white rice, which accounted for almost 50 per cent of Indian rice exports in 2022. In a written statement, the Indian food ministry said that due to an 11.5 per cent increase in the retail price of rice over the last 12 months, the Indian government has had to amend their export policy to ensure a ready supply of non-basmati white rice in the Indian market. India has also stated the export ban has been put in place as a precautionary measure against the El Niño weather phenomenon affecting the future October–December rice crop. Should the rainfall fail, around 35 per cent of India’s rice production will be detrimentally affected.

Non-basmati white rice is a major food source for the poor in Nepal and Bangladesh, and broken rice is the most imported category of Indian rice in several West African nations, including Benin, Togo, Mali, and Senegal. The export ban will hit these poorer nations the hardest globally, as the majority of rice consumption in the developed market is basmati rice, meaning that developed countries will not have their food budgets heavily affected.

Implications of this decision


This ban has already had affects globally. Panic buying of rice has been taking place in Canada and across the United States, with customers attempting to stockpile multiple bags of rice. The Asian market has also been sent into a panic,” with concerns growing for global food security. This concern appears to be a warranted one - the banned Indian rice exports amount to around 15 per cent of the global rice trade.

There is much worry as to how this move from India will affect the global food market, which has already inflated in price due to Ukraine’s invasion by Russia in 2022. B.V. Krishna Rao, the president of the Rice Exporters Association, has stated that India’s move will disrupt the rice market globally with far greater velocity than what occurred with Ukraine’s wheat market after the Russian invasion. This is due to the fact that no other country is able to replace the shipment output of India. Thailand and Vietnam, respectively the 2nd and 3rd highest rice exporters in the world, do not have enough rice in their inventories to plug this gap.

India’s move could become the catalyst for a future period of global food insecurity. The food market has already been affected by multiple recent events, including Pakistan’s severe flooding in 2022 that decimated millions of acres of crops. The return of the El Niño weather pattern in late 2023 also poses a huge issue for food crop production, as the last El Niño period resulted in 2016 becoming the hottest year in record. El Niño episodes in Southeast Asia over the last two decades have led to the inflation of food prices due to the low rainfall in the region. In past El Niño episodes, Southeast Asia has usually faced hotter and drier temperatures than average, resulting in rice crops declining or outright failing due to the extreme weather conditions. Inflation in price has already begun due to nations anticipating El Niño’s disastrous effects, with Vietnam’s rice exports recently soaring to their highest level in over ten years. The situation could further deteriorate if other rice exporting countries who make up significant percentages of the global rice trade, such as Thailand, Vietnam, and Pakistan, commit to similar rice export bans in the event that El Niño ruins their rice crops. This situation occurred in 2007–2008, where Vietnam, Cambodia, and India all had rice bans in effect. The result of this was the price of rice tripling in a few months, and a global rice crisis occurring.

Effect on the Ukraine war


The Ukraine war has already caused the global rice market to inflate 15-25 per cent in price since September 2022. The Indian ban happening on top of this will most likely result in further inflation of price not just of rice, but of other food products as well. A shortage of rice will also have further impacts on other food products including wheat, soya beans, maize, and corn, which are used as rice substitutes. However, Ukraine and Russia are major suppliers globally of many of these food products. As such, due to Russia’s rejection of the Black Sea Grain Initiative, which would allow the reduction in price of certain food products, the global food crisis will become further exacerbated. Grain and other wheat-products, in particular, will likely fare the worst due, and as the primary food product for 35 per cent of the world’s population, this rice ban has the potential to increase rates of human starvation.

India’s export ban is likely to stay in place until after the national elections occurring in May 2024, in order to keep domestic prices low. Ideally, India will relax some of the restrictions listed in the rice ban in the event that El Niño is worse than expected and rice crop yields are negatively affected around the world. Unfortunately, the high likelihood of other countries committing to their own rice export bans means that India’s ban is not likely to end any time soon.

 

Maryam Kalif is a Law/Arts student with an interest in refugee law and global gendered violence against women. Maryam volunteers at community legal clinics, and her overall ambition is to help people with her legal knowledge.



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