Falling grain stocks: Will India next ban rice exports? | Business and Economy News

Bangalore, India – When Desmond Aquai, a Ghanaian student based in Bangalore, remembers his family in Accra, he comes on a video call with them during the meal, and they eat the same dish of rice from both sides. “Since we are all eating Indian rice, it feels like we are sharing food, even though we are far away,” said the 23-year-old commerce postgraduate student.

It is not just the Akwai family that gathers on Indian rice. By far the largest grain exporter in the world, India is the single largest source of rice for rich Middle Eastern countries such as Saudi Arabia and the United Arab Emirates, and developing West African countries such as Ghana, Benin and Togo. China, which started importing rice from India a few years ago, now considers the South Asian country as its single largest supplier.

Now, food for more than half of the planet’s food could help India redeem itself after New Delhi’s ban on wheat exports last month at a time when the war in Ukraine has led to global food shortages. Has created a crisis. The US Department of Agriculture estimates that both rice production and demand will reach new global records this year. Experts say India is also expected to see higher production and higher consumption – unlike wheat, where the recent crop was much worse than forecast.

But the ban on wheat exports has left international food markets with the possibility of similar sanctions imposed by India. Analysts say the value of the country’s rice exports rose more than 10 percent in May from a year earlier, largely due to these concerns. He said how India balances its domestic needs and its rice exports could prove the difference between food security and hunger for millions of people around the world.

Paul Dorosh, director of development strategy at the International Food Policy Research Institute, told Al Jazeera, “If India imposes severe restrictions on rice exports, it will be disastrous, especially for some of the poorest countries. They depend on imports. “

For now, there is no need to worry about possible export bans on rice, said Vinod Cole, executive director of the All India Rice Exporters Association, a leading industrial body in the sector. He said the previous crop was good, there was ample supply of rice in warehouses for the country’s wide subsidized food distribution system and production estimates for the current season were promising.

“We have not received any indication from the government that it intends to impose any restrictions on exports,” Cole told Al Jazeera. Why would India need such a ban?

The food supply is less strong

In fact, India’s current rice stock – 33 million metric tons – is at its highest this year, at least since 2016, according to the Food Corporation of India (FCI), which buys food from farmers. From Government for Public Distribution System (PDS).

Conditions in La Nina – Cool sea surface temperatures in the eastern equatorial Pacific Ocean – are expected to prevail during the Indian monsoon season from June to September. It should also help improve the country’s rice production, said Kelly Gohari, a senior research analyst at Grow Intelligence, an American agricultural advisory group. He said India had produced a record 129.7 million metric tonnes of rice last year, also under La Nina.

But when it comes to the sharp decline in wheat production this year – which has led to a ban on exports – India’s food supply looks less strong. In early June, rice and wheat stocks combined with FCI were the lowest since 2017.

India’s PDS provides subsidized food to 800 million people. Already, some states have started offering more rice to meet the wheat shortage, which is part of the right to food campaign, said Deepa Sinha, a development economist at Ambedkar University in New Delhi. That’s part of a network of food security measures. “This will definitely affect the quantity of rice available for export,” Sinha told Al Jazeera.

Sinha also doubts the accuracy of the methods used by the Indian government to forecast production. The government had predicted a better wheat crop than last year – far from the actual production. “It’s a problem because we can’t reuse it with rice,” he said. “I hope they have learned their lesson.”

A ban on rice exports will destroy the poor countries that depend on Indian rice.[File: Anindito Mukherjee/Bloomberg]

Banning countries will suffer the most from food insecurity.

India’s expectations of strong production from the current rice growing season – harvest in October and November – depend on good monsoon forecasts. “If these conditions change, it will be natural for India to reconsider its estimates,” Dorosh said.

Dorothy said that if India decides that it needs to reduce exports to ensure that it has enough food for its own population, it can choose different methods for basmati rice. – Fragrant, long-grain variety that is more expensive – and the rest, Dorothy said. Basmati rice is mainly imported from Middle Eastern countries, but due to cost, it is not basic for most Indians. The PDS system relies on non-basmati rice.

In 2008, India banned the export of non-basmati rice to curb rising inflation – while allowing varieties of basmati to go abroad. The ban was lifted only in 2010. Once again, costs are rising in India, with wholesale prices rising to about 15.9% in May, well above market forecasts.

But experts say the ban on non-basmati rice exports will hit food-insecure African countries the hardest, as they are the biggest importers. Goughary of Gro Intelligence told Al Jazeera that “any significant reduction in India’s rice production could undermine an already complex global food security perspective.”

Cole of the Exporters Association said that China, which after many years has finally imported greens from several Indian establishments, also buys non-basmati rice, mainly for making noodles, rice wine and animal feed. of the. This would allow China, the world’s largest rice-producing country, to use its produce for domestic consumption – a luxury it would not have if India cut off rice supplies.

Dorothy fears that export sanctions will not end with India. “I’m concerned that doing something with others to protect their domestic markets could trigger a series of reactions,” he said. Indonesia temporarily banned palm oil exports earlier this year after the war in Ukraine cut off the supply of sunflower oil from the edible oil market.

Akwai, the student said he did not want to consider any scenario without rice. “This is what we eat in virtually every meal,” he told Al Jazeera, describing rice as a “bond” between India and Ghana. “I would like to believe that India will not break it.”

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