On 20th of July, 2023, world’s largest rice exporter-India, banned exports of non-basmati white rice in a move to stabilize prices in the domestic markets of the country and the Government of India’s (GOI’s) move have clogged ports with approximately 200,000 tonnes of the staple.
Late but heavy monsoon rains led to crop damage and drove up prices of the grain and as a result the GOI had to impose restrictions to take forward the country’s interests.
The Story
Located in Asia, India is the second largest rice producer and the largest rice exporter in the world. The country exports different varieties of rice (both basmati and non-basmati) to over 150 countries around the world and any disruptions in rice supply from India is bound to raise troubles for the nations dependent upon it for their rice needs.
On similar lines, India’s non-basmati white rice export ban has raised troubles for a number of countries around the globe.
While countries continue to struggle to source the staple for their domestic consumption needs, reports suggest that as much as 200,000 tonnes of rice remain stuck at different ports of the country, including 5,000 tonnes at Syama Prasad Mookerjee Port in Kolkata.
Although most cargos and containers obtained customs clearance before the Directorate General of Foreign Trade (DGFT) put out the notification in the public domain, the staple still remains unshipped at the ports across the country.
Comments by the Market Participants
Mr. Nitin Gupta, senior vice president of Olam Agro India Ltd. commented that approximately half-a-million-tonnes of cargo (if not more) remains stuck at ports. He went on to explain the reason behind this.
“The reason being people were aware of an impending change in the rice export policy as prices were shooting up for the last one month, creating inflationary fears.”
The Bottom Line
India’s restrictions on non-basmati white rice exports that the Asian nation imposed in a surprise move on 20th of July 2023 have raised troubles for a number of nations dependent upon it for their rice needs and while they struggle to source the staple from different rice exporting nations, as much as 200,000 tonnes of rice remain unshipped at the different ports of the country.
Six people aware of the matter said that non-basmati white rice remains stuck at different Indian ports in the absence of customs clearance before the government’s notification.
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