BNR – India has banned the exportation of white rice to prevent the growing price hikes in the region. Heavy rainfall in the country has damaged rice cropland, resulting in over 11% price hike in the last year.
White rice (basmati excluded), now makes up around 25% of rice exportation stock in India. The information is according to the new policy revealed by the Ministry of Consumer Affairs.
Global Food Price Rise Ahead, Analysts Caution
Analysts cautioned that this step may give rise to food prices around the world. Head of investment analysis and research at Hargreaves Lansdown, Emma Wall, also said the move will certainly affect food prices.
Furthermore, food vendors are now under stress, particularly after Russia’s move in the past few days. Russia has pulled out of an agreement that ensures a secure route for Ukrainian rice and wheat.
India is among the globe’s largest rice suppliers and accounts for over 40% of international cargo. The country’s main consumers are the nations of Africa and Asia.
In the past year, India implemented a 20% exportation tax in an attempt to deter sales abroad. Furthermore, it has restricted the amount of grain cargo, especially wheat and rice. However, exportation is much more rewarding than selling in the local market for farmers in India.
The Indian government stated that the farmers will still get to sell other kinds of rice abroad, including basmati rice. Moreover, it will examine inquiries about allowing cargo to other states based on food scarcity.
Russia-Ukraine War Causes Rice Shortage
The Russian-Ukrainian war has resulted in food price hikes.
The global stress has since relaxed. In India, however, the poor climate has destroyed cropland in several northern states. This has led to an increase in prices for a lot of products, such as tomatoes and onions.
Prices of vegetables have risen 12% from May to June, which contributed to hiking living costs. Additionally, inflation increased to 4.8% in June, higher than projected, due to the rising food costs.
The rising cost of living has put political pressure on the government in India, ahead of national elections next year. The country will also see state-level elections in the coming months.
The rising living costs have increased political lobbying with the Indian government, especially since the elections are in 2024.
The expert in agricultural policies in India, Devinder Sharma, stated that the government was attempting to evade a production shortcoming. A shortage in output is looming, particularly with the rise of regions that plant rice in the south.