India’s rice export ban has sparked panic buying in US supermarkets, taking the price of a 20-pound bag from US$16 to nearly US$50 in some stores.
The South Asian country, which accounts for 40 percent of global rice exports, on Thursday ordered a halt to its top rice export category, non-Basmati rice, to calm domestic prices, raising fears of a global shortage.
Videos and reports shared on social media over the weekend show Native Americans waiting in long lines or panicking to buy rice in Texas, Michigan, New Jersey, Alabama, Ohio, Illinois and California.
According to Business Line, some stores have raised the price of a 20-pound bag to $46.99 and started money-making programs to capitalize on the panic.
“Some Desi grocery stores had innovative ideas to force customers to spend at least $35-$50 on other items to buy a single bag of rice, which is outrageous,” a shopper told the store.
India’s rice export ban has sparked panic buying in some US supermarkets
Videos and reports shared on social media over the weekend show Native Americans in Texas, Michigan, New Jersey, Alabama, Ohio, Illinois and California buying in panic
According to PBS Frontline, U.S. rice prices have risen about 11 percent on average.
A Mason, Ohio store is rationing the grain to a 20-pound bag per capita, costing $24, PBS reported.
Non-basmati rice is the most commonly used rice in traditional American recipes, as well as in Asian and Mexican cuisine.
The move shows Prime Minister Narendra Modi’s government’s sensitivity to food inflation ahead of general elections almost next year.
The Indian government said the ban will come into effect from July 20 and only vessels currently loading will be allowed to export.
Parboiled rice, which accounted for 7.4 million tonnes of exports in 2022, is not covered by the ban, the government said.
Rice is a staple food for more than three billion people, and nearly 90 percent of the water-intensive crop is grown in Asia, where El Niño weather typically brings less rainfall.
But heavy rains in northern India in recent weeks have damaged newly planted crops in the states of Punjab and Haryana.
Rice fields have been under water for over a week, destroying seedlings and forcing farmers to wait to reseed rice seeds.
In other major rice-growing countries, farmers have set up rice nurseries but have been unable to transplant the seedlings due to insufficient rainfall.
The rice acreage was expected to increase after New Delhi raised the purchase price of rice, but so far farmers have planted paddy fields in an area 6 percent smaller than in 2022.
“In order to ensure sufficient availability of non-basmati white rice in the Indian market and to mitigate the price increase in the domestic market, the Indian government has changed the export policy,” the Food Ministry said in a statement, noting an 11.5 percent rise in retail prices over a 12-month period.
His government has extended a wheat export ban after restricting rice shipments in September 2022. Sugar exports were also limited this year as sugar cane yields fell.
Frontline reported that rice prices in the country rose an average of about 11 percent after the ban was announced
The Indian government said the ban will come into effect from July 20 and only vessels currently loading will be allowed to export
This week, prices for rice exported from Vietnam, the world’s third-largest exporter after India and Thailand, rose to their highest level in more than a decade amid mounting El Niño supply concerns.
Vietnam’s 5 percent broken rice was offered for $515-$525 a ton — its highest price since 2011. India’s 5 percent broken parboiled variety was near a five-year high at $421-$428 a ton.
Buyers could head to Thailand and Vietnam, but their 5 percent broken rice could cost $600 a ton, a European trader said.
China and the Philippines, which generally buy Vietnamese and Thai rice, will be forced to pay significantly higher prices, another European trader said.
While Thailand and Vietnam do not have enough inventories to make up the deficit, African buyers would be hit hardest by India’s decision, Rao said, adding that many countries will urge New Delhi to resume supplies.
Other top buyers of Indian rice are Benin, Senegal, Ivory Coast, Togo, Guinea, Bangladesh and Nepal.
“India would disrupt the global rice market at a far greater rate than Ukraine would have done with the Russian wheat market invasion,” BV Krishna Rao, president of the Rice Exporters Association, told Portal.
Last week Russia stalled a landmark war deal that allowed grain shipments from Ukraine to countries in Africa, the Middle East and Asia where hunger is a growing threat and high food prices have pushed more people into poverty.
Kremlin spokesman Dmitry Peskov said the Black Sea Grains Initiative would be suspended until demands were met to bring Russian food and fertilizers to the world. An attack on Monday on a bridge connecting the Crimean peninsula with Russia was not a factor in the decision, he said.