Sugar exports: India’s curbs on wheat and sugar exports spark concern that rice could also be subsequent

India’s curbs on wheat and sugar exports despatched shock waves by means of international markets because it marked an escalation in meals protectionism that’s seen international locations choke off flows of locally-grown provides to the world. The same transfer on rice by the No. 1 exporter at a time when crops like wheat and corn are hovering would threaten to plunge tens of millions extra into starvation and increase inflation dangers.

“The federal government has already imposed restrictions on wheat exports; it’s a matter of time when restrictions on rice exports is likely to be thought-about,” mentioned Radhika Piplani, an economist at

. The problem shall be to see if such curbs will decrease meals costs and inside what timeframe, she added.

A spokesman who represents each the meals and commerce ministries wasn’t instantly out there for remark.

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India has stockpiled greater than sufficient rice and costs have been beneath management. Rice is carefully associated to wheat in Indians’ weight loss program and the federal government’s meals ration system. State purchases of wheat for the meals support program are anticipated to be lower than half in contrast with the yr earlier and the federal government plans to distribute extra rice, spurring expectations that authorities will wish to guarantee ample provides of low cost rice domestically.

“These public reserves of rice are greater than ample to satisfy the nation’s public distribution wants, even with the enlargement of rice rations because of the prevailing wheat scenario,” mentioned Shirley Mustafa, an economist at UN Meals and Agriculture Group.

The federal government might contemplate limiting rice exports to make sure home provides and stop an increase in costs, the Financial Instances reported. A committee led by the Prime Minister’s Workplace is doing a product-by-product evaluation of important commodities, together with non-Basmati rice, and swift measures are anticipated if there are any indicators of a worth rise, the paper mentioned, citing an unnamed official.

Rice has been the one staple grain that’s serving to to maintain the world meals disaster from getting worse. In contrast to wheat and corn, which have seen costs skyrocket because the warfare in Ukraine disrupts provides from a serious breadbasket, rice costs have remained subdued as a consequence of ample manufacturing and current stockpiles.

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That outlook can change if India decides to curb rice exports. It might spur different international locations to observe the same playbook, because it did throughout the 2008 meals disaster, when Vietnam additionally restricted rice shipments. Asia produces and consumes about 90% of rice, with India accounting for 40% of worldwide commerce.

“Rice provides are ample within the nation and there’s no have to ban or prohibit exports,” mentioned B.V. Krishna Rao, president of the Rice Exporters Affiliation. “If the federal government nonetheless desires to impose a quantitative restriction it may be a political name and the commerce will welcome that within the nationwide curiosity.”

Financial leaders beneath Prime Minister Narendra Modi are taking a coordinated transfer to sort out inflation, in search of to sluggish worth will increase and ease the influence on customers. Retail inflation, which is monitoring at an eight-year excessive, is a politically-sensitive situation and may affect how individuals vote in elections.

Historical past gives some information on how a rice export curb would possibly play out. Through the 2007-08 meals disaster, India confronted hovering wheat costs and determined to restrict exports. The federal government purchased extra rice for its meals distribution program as a substitute of wheat. To make sure low cost and plentiful provide of rice, officers blocked exports of non-Basmati rice in October 2007.

A call to restrict rice exports will rely on how costs fare within the coming weeks, mentioned Suvodeep Rakshit, senior economist at Kotak Institutional Equities. Rice is about to be sown and output relies on the climate. If the monsoon is erratic and rice costs bounce, it’s seemingly that exports shall be curbed, he mentioned.

Rice is recognized by its size and form. Basmati is a long-grain rice identified for its distinct aroma. Basmati rice exports totaled 3.95 million tons in 2021-22 whereas non-basmati shipments reached 17.26 million tons.