India bans export of non-basmati white rice with immediate effect

India, the largest exporter of rice in the world, has announced a restriction on export of non-white basmati rice "with immediate effect," the government said in a statement. The move could potentially cause prices of rice to rise even further, globally.

India to ban sales of non-basmati white rice

Inidia has restricted the sale of non-basmati white rice with immediate effect. A notice was issued by the Directorate of Foreign Trade (DGFT), which comes under the Department of Commerce.

Explaining the reasons behind the move, the Ministry of Consumer Affairs, Food and Public Distribution said, “In order to ensure adequate availability of non-basmati white rice in the Indian market and to allay the rise in prices in the domestic market, Government of India has amended the Export Policy of the above variety from ‘Free with export duty of 20%’ to ‘Prohibited’ with immediate effect.”

“Domestic prices of rice are on an increasing trend. Retail prices have increased by 11.5% over a year and 3% over the past month,” the Ministry said in a statement, adding, “Export duty of 20% on non-basmati white rice was imposed on 8.09.2022 to lower the price as well as ensure availability in the domestic market.”

“However, the export of this variety increased from 33.66 LMT (Sept-March 2021-22) to 42.12 LMT (Sept-March 2022-23) even after imposition of 20% export duty,” it said.

Sharp increase in exports 

As per the statement, “In the current FY 2023-24 (April-June), about 15.54 LMT of this variety of rice was exported against only 11.55 LMT during FY 2022-23 (April-June), i.e. an increase by 35%. This sharp increase in exports can be ascribed to high international prices due to geo-political scenario, El Nino sentiments and extreme climatic conditions in other rice producing countries, etc.”

“Non-basmati white rice constitutes about 25% of the total rice exported from the country. The prohibition on export of non-basmati white rice will lead to lowering of prices for the consumers in the country,” it said.

“However, there is no change in the export policy of non-basmati rice (par boiled rice) and basmati rice, which forms the bulk of rice exports. This will ensure that farmers continue to get the benefit of remunerative prices in the international market,” it added.

India exported 10.3 million tonnes of non-basmati white rice last year and alternative suppliers did not have spare capacity to bridge the gap, senior analyst Oscar Tjakra said. 

Wheat prices have already begun to rise as a result of Moscow's withdrawal of the Black Sea grain agreement that protected Ukrainian exports, he noted. 

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