In July 2023, India imposed a ban on the export of non-basmati white rice due to dwindling public stock in the Central pool, rising cereal prices, and the potential threat of an irregular monsoon season. The decision has had significant effects on domestic and global rice prices.
Reasons for India’s Export Restrictions on Rice
Three key factors led India to restrict rice exports: maintaining domestic food security, combating rising domestic prices, and mitigating risks related to unpredictable monsoon seasons. India’s large population requires a steady food supply, and with the Ministry of Agriculture and Farmers Welfare estimating a 3.7% drop in rice production in the 2023-24 season, keeping sufficient stocks domestically became essential. Additionally, to control inflation and keep consumer prices stable, the government aimed to prevent a surge in domestic rice prices. Lastly, given India’s heavy reliance on the monsoon season for agricultural production, export restrictions served as a precautionary measure against poor monsoon seasons affecting crop yields.
Impact of Export Restriction on Non-Basmati Rice
The restriction led to immediate and substantial increases in global rice prices, and while prices have since moderated, they remain elevated compared to before the ban. Domestically, rice prices continue to surge; retail prices in October 2023 were 12.59% higher than the previous year and 11.72% higher than at the time the export regulations were implemented. The export ban also disrupted global trade and affected food security in importing countries.
Key Facts about Rice in India
Rice is a principal food source for most of the Indian population. It is a kharif crop, grown primarily during the monsoon season, and requires a high temperature (over 25°C), high humidity, and annual rainfall over 100 cm. Leading producers of rice in India include West Bengal, Uttar Pradesh, and Punjab, while the high-yielding states are Punjab, Tamil Nadu, Haryana, Andhra Pradesh, Telangana, West Bengal and Kerala. India is the world’s second-largest rice producer, next to China.
Rice Export Structure in India
India holds the distinction of being the world’s largest rice exporter, with about 40% of total global rice exports during 2022. Indian rice exports fall into two categories: Basmati and Non-basmati. In the 2022-23 fiscal year, India exported 45.61 lakh metric tonnes of basmati rice and 177.91 lakh metric tonnes of non-basmati rice. The top destinations for these exports vary, with the primary importers of basmati rice including Iran, Saudi Arabia, Iraq, UAE, and Yemen, and those of non-basmati white rice including Benin, Madagascar, Kenya, Cote D’ Ivoire, Mozambique, Vietnam.
Summary of UPSC Civil Services Examination Questions related to Rice Production and Export
Past UPSC examination questions have featured inquiries about major rice exporters worldwide and raw materials that can be used for the production of biofuels according to India’s National Policy on Biofuels. Answering these questions requires knowledge of India’s standing in the global rice market and understanding of the National Policy on Biofuels, 2018. This policy allows for the conversion of surplus quantities of food grains to ethanol and expands the scope of raw material for ethanol production, allowing for the use of sugarcane juice, sugar beet, corn, cassava, damaged wheat, broken rice and rotten potatoes.
