India’s rice export ban has led to panic buying in US supermarkets, pushing the price of a 20-pound bag from $16 to nearly $50 in some stores.
The South Asian country, which accounts for 40 percent of world rice exports, on Thursday ordered the halt of its largest rice export category, non-basmati rice, to calm domestic prices, fueling fears of global shortages.
Videos and reports shared on social media over the weekend show Indian Americans standing in long lines or panic buying rice in Texas, Michigan, New Jersey, Alabama, Ohio, Illinois and California.
Some stores have raised the price of a 20-pound bag to $46.99 and have begun cashing in on the panic, according to Business line.
“A few desi grocery stores came up with innovative ideas to force customers to spend a minimum of $35-$50 on other items to buy a single bag of rice, which is outrageous,” one customer told the outlet.
India’s rice export ban has led to panic buying at some US supermarkets
Videos and reports shared on social media over the weekend show Indian-Americans panic buying in Texas, Michigan, New Jersey, Alabama, Ohio, Illinois and California
According to PBS Frontline, rice prices in the US have skyrocketed an average of 11 percent.
A store in Mason, Ohio, rations the grain to a 20-pound bag per capita, which costs $24, PBS reported.
Non-basmati rice is the most common rice used in traditional American recipes, as well as Asian and Mexican cuisine.
The move shows how sensitive Prime Minister Narendra Modi’s government is to food inflation ahead of general elections almost next year.
The Indian government said the ban would take effect from July 20 and only vessels currently loading would be allowed to export.
Parboiled rice, good for 7.4 million tons of exports in 2022, is not covered by the ban, the government said.
Rice is a staple of more than 3 billion people, and nearly 90 percent of the water-intensive crop is produced in Asia, where the El Nino weather pattern usually brings less rainfall.
But heavy rains in northern India in recent weeks have damaged newly planted crops in the states of Punjab and Haryana.
Rice fields have been flooded for more than a week, destroying seedlings and forcing farmers to wait before replanting the rice seeds.
In other major rice-producing states, farmers prepared paddy fields but were unable to transplant the seedlings due to insufficient rainfall.
Rice acreage was expected to increase after New Delhi raised the purchase price of rice, but farmers have so far planted rice fields in an area 6 percent smaller than in 2022.
“In order to ensure the availability of sufficient white rice without basmati in the Indian market and to counter the price increase in the domestic market, the government of India has adjusted its export policy,” the Ministry of Food said in a statement citing an 11.5 percent increase in retail prices in 12 months.
His government has extended a ban on wheat exports after curbing rice shipments in September 2022. It has also capped sugar exports this year as sugarcane yields fell.
Frontline reported that after the announcement of the ban, rice prices in the country have increased by about 11 percent on average
The Indian government said the ban would take effect from July 20 and only vessels currently loading will be allowed to export
This week, prices of rice exported from Vietnam, the world’s third-largest exporter after India and Thailand, rose to their highest level in more than a decade amid growing supply concerns due to El Nino.
Vietnam’s 5 percent broken parboiled rice was offered for $515-$525 per ton – the highest since 2011. India’s 5 percent broken parboiled variety has hovered around a five-year high of $421-$428 per ton.
Buyers can move to Thailand and Vietnam, but their 5 percent broken rice could cost $600 a ton, a European trader said.
China and the Philippines, which generally buy Vietnamese and Thai rice, will have to pay sharply higher prices, another European dealer said.
While Thailand and Vietnam don’t have enough supplies to close the shortfall, African buyers would be most affected by India’s decision, Rao said, adding that many countries will press New Delhi to resume shipments.
Other top buyers of Indian rice are Benin, Senegal, Ivory Coast, Togo, Guinea, Bangladesh and Nepal.
“India would disrupt the world rice market much faster than Ukraine did in the wheat market with the Russian invasion,” BV Krishna Rao, president of the Rice Exporters Association, told Reuters.
Last week, Russia halted a breakthrough war deal that allowed grain to flow from Ukraine to countries in Africa, the Middle East and Asia, where hunger is a growing threat and high food prices have pushed more people into poverty.
Kremlin spokesman Dmitry Peskov said the Black Sea Grain Initiative would be suspended until demands to bring Russian food and fertilizer to the world are met. An attack Monday on a bridge connecting the Crimean peninsula to Russia was not a factor in the decision, he said.