India Bans Export Of Non-basmati White Rice

India has banned the export of non-basmati white rice with immediate effect, the world's top rice exporter said on Thursday, in a move one export group said could have an impact comparable to that of the Ukraine war on wheat supplies.

The government said it was imposing the ban after retail rice prices climbed 3 per cent in a month as late monsoon rains damaged crops. While a late monsoon caused a major shortfall of rain up to mid-June, heavy rains have caused significant damage.

India accounts for more than 40 per cent of world rice exports but low inventories mean any cut in shipments will fuel food prices driven up by Russia's invasion of Ukraine last year and erratic weather.

"In order to ensure adequate availability of non-basmati white rice in the Indian market and to allay the rise in prices in the domestic market, the government of India has amended the export policy," the government said in a statement that said retail prices were up 11.5 per cent in 12 months.

The move demonstrates the sensitivity of the government of Prime Minister Narendra Modi to food inflation ahead of a general election nearly next year.

His administration has extended a ban on wheat exports after curbing rice shipments in September 2022. It also capped sugar exports this year as cane yields dropped.

"India would disrupt the global rice market with far greater velocity than Ukraine did in the wheat market with Russia's invasion," BV Krishna Rao, president of the Rice Exporters Association told Reuters.

Rice is a staple for more than 3 billion people, and nearly 90 per cent of the water-intensive crop is produced in Asia, where the El Nino weather pattern usually brings lower rainfall. Global prices are already hovering at their highest level in 11 years.

"The sudden ban on exports would be very painful for the buyers, who can't replace the shipments from any other country," Rao said.

While Thailand and Vietnam don't have enough inventories to plug the shortfall, African buyers would be most affected by India's decision, Rao said, adding that many countries will urge New Delhi to resume shipments.