India tightens its ban on rice exports to control domestic prices

india this Sunday tightened its restrictions on rice exportwith limits on the sale abroad of the basmati variety that are added to the total ban on the trade of others of this cereal.

Among the new measures announced by the Ministry of Commerce and Industry is a ban on the export of basmati rice priced below $1,200, with the intention of curbing international trade in the grain grown in India.

“The Government has received credible information about the misclassification and illegal exports of rice of varieties other than basmati, the export of which was banned on July 20, 2023.″, explained the ministry of India.

The minimum price for basmati rice exports comes with the intention of stopping the sale abroad of this cereal, whose export has been prohibited, classified under another category.

This week, india imposed a 20% tax on parboiled rice exports, while the sale of broken rice was banned entirely last year.

And it is that, according to official data, rice exports from the Asian country have grown despite the limitations, with 7.3 million metric tons so far this year compared to 6.7 in the same period of 2022.

India is the world’s leading rice exporter. Only in 2022, the Asian country sold 22.3 million tons of this cereal abroad for about 11.1 million dollars, mostly from varieties of rice other than basmati.

A rise in international prices caused by lower production in countries like Thailand has contributed to skyrocketing rice prices on world markets, with the highest prices since 2011 according to the FAO.

India surprisingly imposed a ban on rice exports of varieties other than basmati to “control domestic prices and ensure domestic food security”.

The Reserve Bank of India (RBI, issuing entity) pointed out in early August that the rise in food prices, with some products such as tomatoes increasing their price by more than 300% compared to their usual cost in recent weeks, it is the main responsible for the increase in inflation to 4.8% in June.

India’s export ban has caused fears of rising global inflation, and voices like International Monetary Fund (IMF) Research Director Pierre-Olivier Gourinchas have called on New Delhi to end the ban.

(With information from EFE)