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Due to the ban on exports, the prices decreased in the country, why the fight in grocery stores in US-Canada?

Pankaj Prasad
Non Basmati Rice Export Ban
Non Basmati Rice Export Ban

India banned the export of non-Basmati white rice.

India on Thursday decided to ban the export of non-basmati white rice. The Center has taken this step to contain the prices in the domestic market. However, this decision posed the threat of rising rice prices in countries around the world. Now the Indians living in America and Canada have started collecting sacks of rice and long queues are being formed here to buy rice.

India is the largest exporter of rice in the world. Therefore, any decision of this is likely to have a huge impact on the prices of food grains. Amidst all this, it is important to know that what decision has India taken regarding non-basmati rice? Why did the government impose this ban? To which countries does India export this rice? Is it having any effect? What is its impact outside India?

What decision did India take regarding non-basmati rice?

The Directorate General of Foreign Trade (DGFT) issued a notification regarding the export of non-basmati white rice. Accordingly, the export policy of non-basmati white rice has been changed from free to restricted. However, exports will be allowed with certain conditions. The rice whose loading had started in the ships before the notification, was approved for export. Along with this, exports will also be possible in those cases where the government has given its permission to other countries. The government has given the above approval keeping in view the food security needs of some countries. In September last year, the government had banned the export of broken rice. Also, 20 per cent duty was imposed on the export of various types of rice.

Why did the government impose this ban?

Sources aware of the matter said that the central government wants to avoid the risk of high inflation in the country ahead of the assembly elections and then the Lok Sabha elections next year. Besides, bad weather has affected rice sowing in major producing states. Therefore, a ban has been imposed on the export of non-basmati rice. The government has taken this step to control the prices of rice in the coming festive season.

According to the data till July 14, kharif sowing has decreased by two percent. Due to deficient rains in West Bengal, Maharashtra and Karnataka, the crop has been sown less. The government's decision may affect 80 percent of rice exports. Due to this, the price of rice will fall in the country, but the prices of rice may increase in the world.

To which countries does India export this rice?

India is the largest exporter of rice in the world. At the same time, the share of non-basmati white rice in the total rice exported from the country is about 25 percent. According to the information, the total export of non-basmati white rice from India was close to $ 4.2 million in the financial year 2022-23. In the previous year, exports were said to be $26.2 million. India exports non-basmati rice mainly to Thailand, Italy, Spain, Sri Lanka and the US.

A total of about 15.54 lakh tonnes of white rice was exported in the first quarter of the current financial year. It registered a growth of 35% as compared to 11.55 lakh tonnes in the same period a year ago. The retail prices of rice in the domestic market have increased by 11.5% in a year and 3% in a month. The export value of this rice in 2022-23 was $42 million. The year before that was $2.62 million.

Is it having any effect?

The ban on export of non-basmati white rice will result in lower prices for consumers in the country. No change in the export policy of non-basmati rice (usna rice) and basmati rice was said to ensure that farmers continue to get the benefit of remunerative prices in the international market. However, this rice consignment will be allowed to be exported subject to certain conditions.

The effect of this decision of the government is also being seen to some extent. According to the latest data from the Department of Consumer Affairs, between July 20 and July 24, the price of one kg of rice has decreased by Rs 1 to Rs 5 in many cities. Kaushambi, Chamarajanagar and Ariyalur saw maximum reduction of Rs 5/kg. After this, people in Bidar, Yadgir and Haridwar are buying rice three rupees cheaper than before. In Araria, Madhepura, Dhanbad, Rampur, Siwan, Amritsar, Giridih, Bhind, Sidhi, Shahdol, Chitrakoot and Buxar, these prices have been reduced by Rs 2 per kg.

What is the effect outside India?

Due to this decision of India, the price of rice has started falling in the country, but the prices of rice have started increasing all over the world. Due to the El-Nino effect, the rise in rice prices in countries around the world that are already grappling with food inflation can also threaten the food crisis. India accounts for more than 40 percent of global rice exports.

The Bloomberg report claimed that the government's decision to ban the export of non-basmati rice could affect nearly 80 percent of India's rice exports. Rice is the staple food of almost half of the world's population. About 90 percent of the global supply of rice in Asia is used for consumption.

Due to this move of India, the prices of rice from other Asian countries increased in the global markets. The impact of the recent decision is being seen among NRIs living in the US and Canada. Long queues have started forming outside the grocery stores here. People in a crowd are climbing over shelves to get bags of rice. Its hallmark was seen in major US cities such as Texas, Michigan and New Jersey. To handle the situation, some shops have imposed sales limits, limiting customers to buying only one rice bag. At the same time, the concern of hoarding rice has also increased.