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Decoding India’s Non-Basmati Rice Export Ban

Decoding India's Non-Basmati Rice Export Ban

In recent times, India has witnessed a significant surge in the retail prices of rice. It has increased at an alarming rate of 11.5% over the past 12 months. This trend in rice prices has been further reinforced in the last three months. In response to this situation, the Central Government of India has imposed a comprehensive ban on the export of all varieties of rice, except for the basmati rice. This decision was made to stabilize the domestic market and ensure an adequate supply of rice for the country’s population amidst the challenging economic conditions. Non-basmati white rice accounts for about 25% of the total rice exported from the country. Also, India’s share in the total rice exports of the world is 40%. This decision of India has affected many countries including America.

The reason behind the decision

Rice, a vital kharif crop, relies heavily on the monsoon’s timely arrival for successful sowing and a bountiful harvest. However, this year’s monsoon has been unpredictable. It has caused excessive rainfall in the northern and northwestern states, resulting in damage to rice crops in Punjab and Himachal Pradesh. On the other hand, the eastern and southern states are experiencing a significant rainfall deficit, impacting paddy crops adversely.

Major paddy-growing states like Karnataka, West Bengal, Andhra Pradesh, and Tamil Nadu have been affected by deficient rains, leading to a decline in paddy production. As a consequence, the government has made the tough decision to ban rice exports, except for basmati rice. This would mitigate potential rice shortages and the possibility of price escalation in the coming days.

Export of rice in India

India has long been recognized as a significant global rice exporter, with a record of 22 million tonnes exported last year. However, the current global rice trade dynamics have experienced a shift with recent developments. Russia’s unexpected withdrawal from the Black Sea grain agreement with Ukraine has added to the complexities of the situation.

Simultaneously, India’s decision to ban the export of non-basmati white rice has further compounded the challenges in the international rice market. As a result, a shortage of rice has emerged worldwide, leading to the potential for increased rice prices. This decision by India is set to resonate across countries globally.

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