India’s Rice Export Ban and Its Global and Domestic Price Impact
Published on: October 30, 2023.
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India’s Rice Export Ban: Impact on Prices and Market
In July this year, India implemented a ban on the export of non-basmati white rice due to depleting public stock, high cereal prices, and concerns about the monsoon. This decision has had a significant impact on the supply, availability, and prices of rice in both domestic and global markets.
Global Impact of India’s Restrictions
Following the export ban, rice prices experienced a sharp increase across markets. Although prices have since decreased, they remain higher than pre-ban levels.
According to the Rice Outlook of the US Department of Agriculture, trading prices for most grades of regular milled rice from Thailand decreased by 5-6% in the past month. However, they are still significantly higher than the prices prior to India’s export ban.
Domestic Rice Prices
Despite the export ban, there has been no relief from the rising prices of rice in India. The daily average wholesale price of rice was recorded at Rs 5,800 per quintal on October 24, 2023, which is 27.43% higher than the previous month.
Retail prices have also increased compared to last year. On October 24, the average daily retail price of rice was Rs 42.80 per kg, a 12.59% increase from a year ago. The prices have remained high despite the implementation of export regulations by the government.
India’s Rice Export Categories
India is the largest exporter of rice globally, with a 40% share of the total rice exports in 2022. The country exports both basmati and non-basmati rice, consisting of various sub-categories.
Basmati rice, which accounted for 45.61 lakh metric tonnes of exports in 2022-23, is primarily exported to Iran, Saudi Arabia, Iraq, UAE, and Yemen.
The non-basmati rice category, which includes varieties like Sona Masuri and Jeera rice, accounted for 177.91 lakh metric tonnes of exports in 2022-23. This category comprises of rice in husk of seed quality, other rice in husk, husked (brown) rice, rice parboiled, non-basmati white rice, and broken rice. While the government has banned the export of broken rice and non-basmati white rice, the remaining sub-categories are still allowed for export.
Rice Procurement and Stocks
The total production of rice in 2022-23 is estimated to be a record 1357.55 lakh tonnes, higher than the previous year and the five-year average. The government has procured 56.04 lakh metric tonnes of paddy from eight states for the Kharif marketing season of 2023-24.
The Food Corporation of India reports a stock of 221.87 lakh metric tonnes of rice in the Central Pool as of October 1, 2023. Additionally, 138.36 lakh metric tonnes of unmilled paddy is available, equivalent to 92.70 lakh metric tonnes of rice, bringing the total rice stock to 314.57 lakh metric tonnes.
Conclusion
India’s ban on the export of non-basmati white rice has had a significant impact on global and domestic rice prices. Despite the ban, prices remain high, posing challenges for consumers and traders. The government continues to procure rice and maintain stocks to meet the country’s food security needs.
Source: Indian Express
