July 21, 2023
DHAKA – India yesterday prohibited the export of non-basmati white rice with immediate effect after late seasonal monsoon rains hurt the crop and raised fears of a production shortfall, reports Reuters.
The late arrival of the monsoon led to a large rain deficit up to mid-June. And while heavy rains since the last week of June have erased the shortfall, they have caused significant damage to crops.
“In order to ensure adequate availability of non-basmati white rice in the Indian market and to allay the rise in prices in the domestic market, the government of India has amended the export policy of this variety,” a government statement said.
Retail rice prices have risen 11.5 per cent over the past year and 3 per cent over the past month, it added.
Contacted, Chitta Majumder, managing director of the Majumder Group of Industries, said although the neighbouring country has banned white rice exports, the demand for this type of rice is low in Bangladesh.
“There is some demand for white rice among people in Sylhet and Chattogram. So, it [the ban on exports] is unlikely to affect prices of the grain in the domestic market,” he said.
Majumder, whose firm also imports rice from India apart from operating rice mills here, said rice is available in the local market because of higher domestic production in the previous two main crop seasons.
“Besides, India has not banned shipments of boiled rice that we usually import to sell locally,” he added.
Until July 17, retail prices of rice had been steady for nearly a month in Dhaka. Prices of coarse grain, the cheapest among other types of rice, edged up 2 per cent to Tk 48-52 per kilogramme on July 18 from a month ago, according to market data compiled by state-run Trading Corporation of Bangladesh.
Reuters said India accounts for more than 40 per cent of world rice exports but low inventories mean any cut in shipments will fuel food prices driven up by Russia’s invasion of Ukraine last year and erratic weather, said Reuters.
“India would disrupt the global rice market with far greater velocity than Ukraine did in the wheat market with Russia’s invasion,” BV Krishna Rao, president of the Rice Exporters Association told Reuters.
Rice is a staple for more than 300 crore people, and nearly 90 per cent of the water-intensive crop is produced in Asia, where the El Nino weather pattern usually brings lower rainfall. Global prices are already hovering at their highest level in 11 years, according to Reuters.
“The sudden ban on exports would be very painful for the buyers, who can’t replace the shipments from any other country,” Rao said.
While Thailand and Vietnam don’t have enough inventories to plug the shortfall, African buyers would be most affected by India’s decision, Rao said, adding that many countries will request New Delhi resume shipments.
Heavy rain in northern parts of India over the last 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 over 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, including West Bengal, Bihar, Chhattisgarh, Andhra Pradesh and Telangana, farmers have prepared paddy nurseries but have been unable to transplant the seedlings due to inadequate rainfall, reports Reuters.