New Delhi: Analysts say rice could be India’s next food protectionism target as it restricts exports of wheat and sugar, a move that could have devastating effects on global food security as it is an important staple.
India’s restrictions on export of wheat and sugar sent shock waves to global markets as it marked a rise in food protectionism It has been observed that countries shut off the flow of locally grown supplies in the world. A similar move on rice by the No. 1 exporter at a time when crops like wheat and corn are on the rise, would risk starving millions of people and fueling inflation risks.
“The government has already banned the export of wheat; It is a matter of time when a ban on export of rice can be considered,” said Radhika Piplani, an economist at Yes Bank Ltd. The challenge would be to see whether such restrictions would bring down food prices and within what time frame, she said.
A spokesperson who represents both the food and trade ministries was not immediately available for comment.
India has stockpiled more than enough rice and prices are under control. Rice is closely related to wheat in the diet of Indians and the food rationing system of the government. State procurement of wheat for the food assistance program is expected to be less than half what it was last year and the government plans to distribute more rice, hoping officials will want to ensure an adequate supply of cheap rice domestically.
Shirley Mustafa, an economist at the United Nations Food and Agriculture Organization, said, “These public stockpiles of rice are more than enough to meet the country’s public distribution needs, even as the current wheat situation has led to a shortage of rice. Even with the increase in ration.”
Government may consider limiting rice exports to ensure domestic supply and check price rise, The Economic Times informed of, The paper, citing an unnamed official, said that a committee led by the Prime Minister’s Office is conducting a product-by-product analysis of essential commodities, including non-basmati rice, and expects quick measures if there is any sign of a rise in prices. Is performed. ,
Rice has been a staple grain that is helping prevent the world food crisis from getting worse. Unlike wheat and corn, whose prices have skyrocketed as the war in Ukraine disrupts supplies from a major breadbasket, rice prices have remained low due to substantial production and existing reserves.
This approach may change if India decides to curb rice exports. This could prompt other countries to follow a similar playbook, as it did during the 2008 food crisis, when Vietnam also restricted shipments of rice. Asia produces and consumes about 90% of rice, with India accounting for 40% of the global trade.
Rice Exporters Association President BV Krishna Rao said, “The supply of rice in the country is sufficient and there is no need to ban or restrict exports.” “If the government still wants to impose quantitative restrictions it may be a political call and trade would welcome it in the national interest.”
Economic leaders, led by Prime Minister Narendra Modi, are taking a coordinated step to tackle inflation, seeking to slow the rise in prices and reduce the impact on consumers. Retail inflation, which is at an eight-year high, is a politically sensitive issue and can affect how people vote in elections.
History provides some guides on how rice exports can be curbed. During the food crisis of 2007–08, India faced rising wheat prices and decided to limit exports. The government bought more rice instead of wheat for its food distribution programme. To ensure a cheap and plentiful supply of rice, the authorities halted the export of non-basmati rice in October 2007.
Suvodeep Rakshit, senior economist at Kotak Institutional Equities, said the decision to limit rice exports would depend on prices in the coming weeks. Rice is about to be sown and production depends on the season. If monsoon Uncertain and a jump in rice prices, it is likely that exports will be curtailed, he said.
Rice is identified by its length and shape. Basmati is a long grain rice known for its distinctive aroma. Basmati rice exports totaled 3.95 million tonnes in 2021-22, while non-basmati shipments reached 17.26 million tonnes. , bloomberg