India Authorizes Rice Export to UAE Amidst Domestic Inflation and Global Food Security Concerns
India Eases Rice Export Ban with 75,000 Tonnes Headed to UAE
In a notable development, the Indian government has granted the export of 75,000 tonnes of non-basmati rice to the United Arab Emirates (UAE). This follows the ban on exports imposed in July to control domestic inflation. The shipment to the UAE will be managed by the National Cooperative Export Ltd, a state-supported enterprise established in January.
Domestic Inflation and Global Rice Trade
India, as the world’s largest exporter of rice, imposed the export ban to mitigate the impact of high cereal inflation, which remains in double digits. The Indian government stated that it would allow shipments to countries in need of food security, once diplomatic requests were approved by the Ministry of External Affairs.
The ban was not without consequences. India, which accounts for a 40% share in global rice trade, saw its decision cause a ripple effect on global rice prices. The Food and Agriculture Organization’s (FAO) rice price index reached its highest level in 15 years, up by 40.31% year-on-year in August 2023.
Food Security and Diplomatic Requests
Since the ban, India has authorized the export of over 1.4 million tonnes of white rice to Singapore, Bhutan, and Mauritius in response to their requests. The Indian government maintains that it will continue to supply rice to friendly countries, provided the exported quantities are used for local consumption and not trading.
Moreover, in response to the needs of other nations, India has also allowed the export of broken rice. This includes shipments of 500,000 tonnes to Senegal, 200,000 tonnes to Indonesia, 100,000 tonnes to Mali, and 50,000 tonnes to Gambia.
Domestic Concerns Drive Export Restrictions
The ban on non-basmati white rice export was imposed three days after Russia withdrew from the Black Sea grain deal, triggering fears of a global food shortage. The Indian government also halted the export of broken rice in September last year, a ban that remains in place. To restrain shipments of parboiled rice, India has also imposed a 20% tariff. In May 2023, the country banned wheat export, although India is not a significant exporter of wheat.
These restrictions on food exports stem from domestic concerns. The Indian government is grappling with high food inflation and potential rice shortage due to the El Nino weather pattern disrupting the monsoon. It’s also preparing for a festive season with soaring food demand, alongside a general election next year and state assembly polls in five states this year.
Conclusion: A Balancing Act
India’s decision to ease the export ban on rice attests to the complexities of balancing domestic economic concerns with its role as a major player in global food security. The move highlights the country’s attempt to meet domestic inflation challenges while responding to international food security requests. The actions taken by the Indian government in this regard will be keenly watched by both domestic and international stakeholders in the coming months.
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