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India has imposed a 20 percent duty on parboiled rice exports with immediate effect. This step of India may increase the price of rice in the world. Let us tell you that rice in other countries has reached close to its highest level in 12 years. India accounts for more than 40% of the world’s rice exports and low stocks held by other exporters mean any drop in shipments could push up food prices due to last year’s Russian invasion of Ukraine and erratic weather. The government has taken this step to provide relief to the people of India.
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Last month, India surprised buyers by banning exports of widely used non-basmati white rice, following a ban on exports of broken rice last year. A Mumbai-based dealer at a foreign trade house said the ban had prompted some buyers to increase purchases of Parbela rice, sending its prices to record highs.
A tie between Thailand and Pakistan will be expensive
“With this duty, Indian parboiled rice will become as expensive as supplies from Thailand and Pakistan. There is hardly any option for buyers now,” the dealer said. India exports 7.4 million tonnes of parboiled rice in 2022. The UN Food Agency’s rice price index hit its highest level in nearly 12 years in July as prices rose on strong demand in major exporting countries after India banned exports.
Prices are likely to rise again
India has now banned all types of non-basmati rice, which is generally preferred by poor consumers in Africa and Asia, said a New Delhi-based dealer at a global trading house.
“Global rice prices started to ease in the last few days after rallying over 25 percent last month due to India’s sanctions. However, prices are expected to rise again,” a trader said.
Stringency on rice, wheat and sugar exports: The recent ban on exports of food items shows the sensitivity of Prime Minister Narendra Modi’s government to food inflation ahead of general elections due almost next year. After restricting rice exports, the government has extended the ban on wheat exports till September 2022. Export of sugar has also been banned this year due to reduced sugarcane production.