India bans all rice exports

India, the largest rice supplier to the Gulf, yesterday imposed a ban on rice exports, a move which is feared to stoke food inflation and make the commodity scarcer in the UAE and rest of the region.

Yesterday's total ban on all types of non-basmati rice, including the popular Palakadan Matta and Thanjavoor Ponni, is part of an effort by India to control inflationary pressures on food items and essential commodities. Besides a rice export ban, India, after an emergency cabinet meeting on Monday night, has reduced import duties of edible oils.

But the dramatic measure has caught UAE's rice distributors and retailers unawares as the rice stocks available would not last for more than seven days. India accounts for more than 50 per cent of UAE's rice imports. Indian rice export to the UAE is around 120,000 metric tonnes per month.

"There is going to be an acute shortage of rice supply and also a sharp price rise. Aggravating the supply shortfall from India is a slowdown in exports from Pakistan and Thailand," said Anish K S, Brand Manager of Nirapara, a leading distributor. The price of US-style Thailand rice has almost surged by more than 70 per cent, from Dh40  to Dh70  per 20 kilo bag following the news of Indian export curbs.

Food inflation in the UAE, where the core inflation is estimated to be hovering above 10 per cent,  has been on an upward spiral over the past 12 months, partly due to a sharp plunge in the value of dollar to which the UAE currency is pegged. Experts said the move to ban rice exports could have an impact not only in Gulf  but also on global rice prices as India is the third largest exporter of the grain, exporting about four million tonnes annually.

The Indian government  also set the minimum export price of India’s premium rice, Basmati, at $1,200 tonne and also extended the ban on export of all pulses for another year.

To combat food inflation, India has been imposing certain restrictions  over the past six months on rice exports by increasing the export price of non-basmati rice to combat food inflation. The price of such rice was increased from $650-$1,000 per tonne last month alone. The move had impacted the prices in the UAE with the price of basmati rice increasing almost three-fold from Dh3.50 per kilo to Dh9-10 in six months.