Centre bans export of non-basmati white rice
Context
On Thursday, the Union government prohibited the export of white rice that isn’t basmati. In a notification, the Union Commerce Ministry’s Directorate General of Foreign Trade stated that the ban would take effect right away and that the only circumstances under which an exemption would be granted would be if the loading of non-basmati rice onto the ship had already started before the notification or the shipping bill had been submitted, and the vessels had already berthed, arrived, and anchored in Indian ports.
What are the reasons for the ban on Non-Basmati white rice?
- Non-basmati white rice was not allowed for export by the Indian Union government, which took this action to combat rising costs and assure a sufficient supply on the domestic market.
- The Union Commerce Ministry’s Directorate General of Foreign Trade announced the prohibition.
- Immediately after the notification was sent, the ban went into force.
Where are most of the exports from?
- Major destinations of India’s non-basmati white rice exports include
- Thailand
- Italy
- Spain
- Sri Lanka
- and the USA.
What are exemptions given to the ban?
- Non-basmati rice cargo that had already started loading onto a ship before the announcement was excluded from the restriction.
- Additionally, exemptions were granted for shipments for which the shipping bill had been submitted and the ships had previously berthed, landed, and anchored in Indian ports before the prohibition.
What are the reasons for the ban?
- The government said that the ban was required because the retail price of non-basmati white rice had risen by 3% in the previous month and by 11.5% over the previous year.
- Despite a 20% export levy being imposed, non-basmati white rice exports had greatly increased.
- This rice variety was exported in roughly 15.54 lakh tonnes in 2023–24, up from just 11.55 lakh tonnes the year before (2022–23).
- The administration ascribed this rise in exports to several factors, including high global prices brought on by geopolitical circumstances, El Nino effects, extreme weather in other nations that export rice, etc.
How is it going to impact the Rice Market of India?
- Food insecurity in importing nations: Due to the disruption of their rice supply chains, Bangladesh, China, Benin, Nepal, and numerous other African countries that depend significantly on Indian rice imports may experience food insecurity. Since rice is a staple grain in many of these nations, any disruption in its supply could result in price increases and shortages, which would negatively affect populations that are already at risk.
- Price Changes in the International Rice Market: The Indian rice export prohibition may cause price changes in the global rice market. When a significant rice producer like India leaves the market, demand may move to nearby suppliers like Thailand and Vietnam, which could result in higher prices owing to supply shortages.
- Impact on Indian Rice Producers and traders: The restriction may have an adverse economic impact on Indian rice producers and traders because they significantly rely on exports for their earnings. They might suffer financial setbacks and be forced to sell their rice to alternate markets, which might result in an excess supply within India and have an impact on domestic prices.
- Trade Relations and Diplomatic Impact: The prohibition on rice exports may harm trade relations between India and the nations that depended on Indian rice imports. It might cause diplomatic resentment and alter the general dynamics of trade between the parties.
- Changes in Global Rice Trade Patterns: Other rice exporting nations like Thailand and Vietnam may see increasing demand and market shares as a result of India, a significant player in the global rice trade, leaving the export market. This might cause the patterns of commerce in rice around the world to change.
- Search for Alternative Food Grains: Importing nations may look for alternate rice suppliers, which could result in a rise in the imports of other food grains or crops. The production and trading of other agricultural products may be affected by this, in turn.
Overall, the Indian government implemented the export ban on non-basmati white rice as a response to the issues brought on by rising prices and higher export volumes. The government sought to stabilize the domestic market and guarantee a consistent supply of this crucial food item by limiting exports.
