India Bans Rice Exports, Triggers Panic Buying in the U.S.

India Bans Rice Exports, Triggers Panic Buying in the U.S.

As Russia blockades and bombards Ukraine’s grain shipments, India — the world’s biggest exporter — has banned exports of rice. The measure was taken by Prime Minister Narendra Modi’s government as it tries to drive down domestic rice prices following a poor harvest.

The shortage of supply is set to raise prices worldwide. India accounts for 40% of the global rice trade.

The export-bound aromatic basmati rice has been exempted from the ban. “India’s decision to ban the export of non-basmati rice has led to consumers panic-buying and stockpiling Indian rice around the world, driving up prices in the process,” the Canadian broadcaster CBC reported Tuesday.

However, an export ban on cheaper rice varieties is expected to hit the poor third-world countries that are already reeling under high levels of inflation. “Those types, which are cheaper than the fragrant, long-grained basmati, are especially popular in poor places such as Bangladesh, Nepal and parts of sub-Saharan Africa. A reduction in its supply will drive up the prices these countries pay, according to rice traders,” British weekly The Economist noted Wednesday.

The London-based daily Financial Times reported on July 21:

India has banned exports of non-basmati white rice, stoking fears of further global food inflation just as Russia’s targeting of grain ships has pushed up wheat and corn prices.

India’s ministry of consumer affairs said on Thursday it would prohibit exports to “lower the price as well as ensure availability in the domestic market”. Rice prices in India have risen 11.5 per cent over the past year and 3 per cent over the past month, according to the ministry, reflecting a 35 per cent year-on-year surge in export volumes between April and June.

India is the world’s biggest rice exporter, accounting for about 40 per cent of global exports. It is followed by Thailand and Vietnam, where prices for 5 per cent broken rice have also surged this year, raising costs for countries hoping to circumvent New Delhi’s ban. Higher prices for the grain — a staple for billions of people worldwide — are likely to stoke global food inflation, analysts said. (…)

India has been contending with higher food prices in recent weeks after heavy monsoon rains damaged crops and disrupted transport, raising the price of tomatoes and other staples.

There are reports of panic buying in the U.S., but clips circulating on Twitter suggest that the phenomenon is largely limited to Indian Americans rushing to secure their staple diet.

“Social media videos from over the weekend show Indian Americans in Texas, Michigan, New Jersey, Alabama, Ohio, Illinois, and California panic-buying rice or standing in long lines,” the NEWSMAX reported Monday. Indian newspaper “Business Line reported that some stores have inflated the price of a 20-pound bag to $46.99 and have come up with ways of capitalizing on the panic,” the broadcaster added.

So it begins. India has banned some rice exports and now people are panic buying up rice. pic.twitter.com/ujpm66ER3n

— Ian Miles Cheong (@stillgray) July 23, 2023

With the Russian navy strangling food shipments from Ukraine, one of the world’s biggest grain producers, poor countries in Asia and Africa are bearing the brunt of the food crisis. The sanctions on Russian gas and oil have already added to the rising inflation, which is eating away at the purchasing power of impoverished people.

The UK Daily Telegraph reported the global impact of India’s rice ban:

If India, the world’s largest exporter, sticks by its ban, millions of people are likely to be plunged into hunger by skyrocketing rice prices, which are already at an 11-year high, according to the Food and Agriculture Organization (FAO).

It comes at a time of acute food insecurity. Last year, as many as 783 million people went hungry – the result of conflict, Covid and climate, the UN said in a recent report. And only last week, the cost of wheat jumped by 13 per cent and corn nine per cent after Russia pulled out of the deal allowing Ukraine to export grains via the Black Sea.

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