NRI of USA, Canada and Australia is hoarding rice. Why does India ban rice export?

In recent news, it has been reported that Non-Resident Indians (NRI) living in the USA, Canada, and Australia have been stockpiling rice in supermarkets. This sudden surge in demand has resulted in long queues outside the stores as NRIs rush to buy rice. The panic appears to be primarily affecting the Indian communities in these countries, as they are the ones hoarding numerous packets of rice.

Due to the excessive buying and hoarding, some stores have taken measures to control the situation by setting a limit on the number of rice packets each customer can purchase. This step is aimed at ensuring that everyone has a fair chance to access the essential commodity without causing shortages for others.

The average price of rice in the USA has increased by 11%. This significant rise in rice prices may be surprising to many. The increase in rice prices can be attributed to several factors.

Rice is the most popular cereal and widely eaten food in the world. Rice is the staple food for nearly 3 billion people around the world. It serves as the main dietary source of calories and nutrition for a significant portion of the global population. People from various countries and cultures rely on rice as a fundamental part of their daily meals.

The Ministry of Consumer Affairs, Food, and Public Distribution had imposed a ban on the export of non-basmati rice. This means that the government has prohibited the export of non-basmati rice from the country for a certain period or until further notice.

Reason of export Ban

1. The ban on non-basmati rice exports aims to make sure there is enough non-basmati white rice available in the Indian market. By restricting exports, the government intends to maintain an adequate supply of this type of rice within the country to meet domestic demand and avoid shortages.
2. By restricting non-basmati rice exports, the government aims to stabilize prices in the domestic market. This measure is taken to calm down any fluctuations or sudden increases in rice prices within the country, ensuring more predictable and steady rates for consumers.

According to the Ministry of Food, the price of rice has increased by 3% in the past month and 11% in the past year.

Total export ban cover around 75 to 80% of total Indian rice exports. In last year India had exported 22 million tons of rice out of which 10 million tons was non-basmati rice.

This ban creates panic situation in global rice market. It is because India is the largest rice exporter of the world.

Role of India in the exporting the rice

• India is a significant supplier of rice to over 150 countries worldwide. This means that India exports rice to a large number of nations around the globe.
• The reason behind India’s prominent role as a rice exporter lies in its abundant rice production. India is one of the world’s leading rice producers, with a diverse range of rice varieties grown across different regions of the country. The favorable climate, fertile land, and expertise in agricultural practices contribute to the country’s high rice output.
• India’s rice exports help meets the demands of various countries that rely on rice as a staple food. The export of rice also plays a crucial role in the country’s economy, generating foreign exchange earnings and supporting the livelihoods of farmers and related industries.
• India’s ability to supply rice to more than 150 countries demonstrates its significance as a major player in the global rice market and its capability to contribute to food security and dietary needs in different parts of the world.
• China is the largest consumer of rice. Bangladesh Nepal, Sri Lanka, United Arab Emirates (UAE), Saudi Arabia, Iran, Iraq, Yemen, United States, United Kingdom, Germany, Netherlands, Singapore, Malaysia, Philippines, Nigeria, South Africa countries imports rice from India.
• Around 42% of countries import more than half of their imports from India. This means that a significant number of nations rely on India as a major source for a substantial portion of their imported goods.

The global food market has been negatively impacted by the Russia-Ukraine war and unpredictable weather conditions. These events have led to uncertainties in food supplies and prices worldwide.

According to Mr. B.V. Krishna Rao, the president of the Rice Exporters Association, the ban on India’s rice exports can disrupt the global rice market even more rapidly than the Ukraine situation.

Reasons of shortage of Rice:

1. Russia Ukraine War: Russia and Ukraine combined account for 29% of global wheat exports. Due to the intensified Russian attack on Ukraine, a disastrous 60,000 tons of wheat has been destroyed. Because of this incident global wheat prices has raise by 7%. The impact of the food crises can be seen on other staple cereal.
2.  Disturbances of weather conditions in India: This year, weather disruptions in India have had a major impact on rice production. However, this year, the country has faced various weather challenges, such as erratic monsoon patterns, excessive rainfall, floods, or droughts in different regions. Farmers have cultivated 6% less area of rice this year.
3. Other countries exports of rice are also decreased: Due to heavy rainfall in Pakistan, the country’s rice production has decreased significantly. As a result, Pakistan’s ability to export rice has also declined.

At the same time, two other major rice-exporting countries, China and Vietnam, are also facing the problem of reduced rice production. In these countries has adversely affected their rice crops, leading to a decrease in their export capabilities as well.

Overall, the decrease in rice production in Pakistan, China, and Vietnam has had a significant impact on the global rice market, resulting in lower rice exports from these countries and potentially affecting rice availability and prices worldwide. It the difficult situations for the countries which are 100% depend on India for Rice.  

Conclusion:

Countries that rely entirely on India for rice imports will be severely affected by the ban on rice exports from India. With India, one of the world’s largest rice exporters, not exporting rice, these countries will face a scarcity of rice in their markets.

The ban will cause a shortage of rice in these dependent countries, leading to a spike in rice prices. Higher prices will impact the purchasing power of individuals, making it difficult for them to afford rice, which is a staple food for many people in these nations.

As a result, the ban on rice exports from India will not only affect the economies of the dependent countries but also have significant implications for the livelihoods and food security of their populations.

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