Global Rice News

India to Maintain Ban on Rice, Wheat, Onion, and Sugar Exports

The commerce minister of India, Piyush Goyal, has stated that the country will continue to enforce export bans on rice, wheat, onion, and sugar in order to stabilize domestic prices. These bans were implemented in May 2022 for wheat, followed by rice and onion in 2023. Goyal emphasized that the government’s priority is to ensure that essential food items remain affordable for the poor and middle-class. Additionally, the government aims to support farmers by increasing procurement at fixed floor prices.

Goyal also highlighted the ongoing crisis in the Red Sea, which is a vital sea route for Indian exports, including basmati rice. The region has experienced a spillover of violence from Israel’s conflict with Hamas. To address potential disruptions, the government is exploring alternative routes and engaging with the Export Credit Guarantee Corporation to lower interest rates for exporters, particularly basmati traders.

In response to speculation, Goyal clarified that India will not import wheat despite expectations of a bumper winter crop. The country anticipates a harvest of 114 million tonnes in the spring, making importation unnecessary. The government has been grappling with high food prices due to reduced output caused by adverse weather conditions in previous years.

India, being the largest rice exporter globally with a 40% market share, implemented the bans on wheat, rice, and onion exports in an effort to mitigate inflation. In December, the annual retail inflation rate reached 5.69%, driven by rising food prices. However, Goyal assured that food prices are now under control and have stabilized. The government will continue to monitor rice prices and may consider additional measures to address any fluctuations.

Furthermore, a ministerial committee has been established to closely monitor the situation in the Red Sea on a daily basis to ensure a prompt response. At present, there are no immediate threats to basmati rice exports.

To support farmers affected by the export ban on onions, the government has initiated open-ended procurement through the National Agricultural Cooperative Marketing Federation (Nafed). Nafed is purchasing onions from farmers at favorable rates to prevent any adverse impact on their livelihoods.

While cereals and vegetables were cheaper in December compared to November, overall food prices continued to rise. Food price inflation increased to 9.53% in December. This inflation disproportionately affects lower-income households, as they allocate a larger portion of their monthly budget to food expenses. However, Goyal expressed confidence that the government’s measures will help stabilize prices and alleviate the burden on consumers.

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