Explainer: Why India Banned Export of Non-Basmati White Rice?

The Indian government has taken a significant step to protect its agricultural interests by imposing an immediate ban on the export of non-basmati white rice. This decision comes in response to the adverse impact of delayed monsoon rains on the rice crop, raising fears of a potential production shortfall. With India accounting for more than 40% of the world's rice exports, this move holds great importance in the global rice trade.

Let's explore the reasons behind this decision and its implications.

India's Dominance in Rice Exports:

India's pivotal role in the international rice trade cannot be overstated. In 2022, the country's rice exports totaled a staggering 55.4 million metric tons, making up more than 40% of global rice exports. Remarkably, India's rice shipments reached a record 22.2 million tons in the same year, surpassing the combined exports of the world's next four biggest rice exporters – Thailand, Vietnam, Pakistan, and the United States.

Diverse Export Destinations:

Indian rice is sought after in more than 140 countries around the world. Key buyers of Indian non-basmati rice include Nepal, Bangladesh, Angola, Cameroon, Djibouti, Guinea, Ivory Coast, and Kenya. For premium basmati rice, countries like Iran, Iraq, and Saudi Arabia remain the primary markets.

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Export Volumes and Previous Restrictions:

In 2022, India exported a substantial 17.86 million tons of non-basmati rice, with non-basmati white rice accounting for 10.3 million tons. Earlier, in September 2022, the government had already imposed restrictions on rice exports, banning the export of broken rice and levying a 20% duty on various rice grades.

Rice Cultivation Seasons and Major Producing States:

Indian farmers engage in rice cultivation twice a year. The summer-sown crop, planted from June onwards, contributes to over 80% of the total rice output. In the 2022/23 crop year, India produced 135.5 million tons of rice. During the winter months, paddy rice is primarily cultivated in central and southern states, which are the key rice-producing regions in the country, including West Bengal, Uttar Pradesh, Andhra Pradesh, Punjab, Odisha, and Chattisgarh.

Measures to Boost Rice Cultivation:

To incentivize rice cultivation, the Indian government raised the purchase price for new-season common rice paddy by 7%, setting it at 2,183 rupees ($26.63) per 100 kg. However, despite these efforts, industry officials express concerns that erratic monsoon rainfall distribution in 2023 might result in a marginal decline in the area under paddy cultivation.

Impact of Delayed Monsoon:

The late onset of the monsoon led to a significant rain deficit until mid-June, which affected the rice crops. Subsequent heavy rains since the last week of June may have eliminated the shortfall, but they also caused considerable damage to the crops.

Summary:

The ban on non-basmati white rice exports demonstrates India's proactive approach to safeguarding its domestic rice production amid weather-related challenges. With India being a crucial player in the global rice trade, this decision holds significant implications for both the country's agricultural sector and rice markets worldwide. The government's focus on protecting its farmers and ensuring sufficient rice availability underscores its commitment to secure food security and stability in the face of climate uncertainties.

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