India’s Food and Consumer Affairs Ministry has taken the move to ban rice exports to “ensure adequate availability” in the country and “allay the rise in prices in the domestic market.” Rice prices rose 11.5% over 2022 and 3% over June 2023 in India.
India is the world’s largest exporter of rice, accounting for 40% of the world’s rice shipments and the country exported a record 22.2 million tons in 2022. Around half of India’s rice exports from 2022—10.3 million—were made up of non-basmati white rice.
The most severe impact of this ban is likely to be felt by India’s neighbours Bangladesh and Nepal, along with several African nations including Benin, Angola, Cameroon, Djibouti, Guinea, Ivory Coast, Kenya—who are the major buyers of non-basmati rice.
Fears about the impact of El Nino on rice crops have also driven up global prices for the grain to a two-year high, according to analytics firm Gro Intelligence.
Source: https://en.wikipedia.org
According to the Food and Agriculture Organization’s All Rice Price Index—which tracks global rice prices - it has risen 13.9% in the past 12 months.
India’s export ban comes days after Russia terminated a key deal that allowed the safe passage of Ukrainian food grains through the Black Sea. The move is expected to have a detrimental impact on global food security, as Ukraine is a key global supplier of wheat, corn and sunflower oil. Russia has blamed the West for its decision. Sanctions have impeded its ability to export its own grain and fertilizer supplies—which Moscow says are also important for global food supply. Wheat prices jumped after Russia withdrew from the Black Sea grain deal. The agreement had sought to prevent a global food crisis by allowing Ukraine to continue to export.
India’s Food Ministry said it had imposed an export duty of 20% on non-basmati white rice in September 2022 to lower prices and improve availability domestically. However, the effort to disincentivize exports did not pan out, as the volume of exports for this variety of rice was 25% in the seven-month period after the implementation of the duty.
Rice inflation has already accelerated from an average 6% year-on-year last year to nearly 12% in June 2023. Rough rice futures rose 1% higher to stand at $15.8 per hundredweight (ctw) following India's announcement. Prices could even surpass second-quarter highs when rough rice hit $18-levels per cwt.
India is now wrestling with high vegetable, fruit and grain prices. Prices of tomatoes in India have surged more than 300% in recent weeks due to adverse weather. A Reuters poll has predicted the country's inflation is likely to hit 4.58% year-on-year on soaring food prices.
Malaysia needs to step-up its food security. Traditionally, we import 60% of our food needs, about RM70-75b annually. The bulk of our rice imports are from Vietnam, Thailand, Pakistan, India and Myanmar. Average imported volume of rice is 750,000 metric tonnes according to BERNAS.
Land for oil palm cultivation is 6 million hectares while rubber is 1 million hectares. Rice and other vegetable crops have another 1 million hectares. New strategies are required to reduce our food import bill when we have land and other resources for food production.
References:
India’s rice export ban could drive global food prices even higher – here’s what you need to know, Siladitya Ray, Forbes
India’s rice export ban could send decade-high prices spiking even further, Lee Ying Shan, CNBC, 20 July 2023
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