India’s rice export ban has sparked panic buying in US supermarkets, causing the price of a 20-pound bag to rise from $16 to almost $50 in some stores.
The South Asian country, which accounts for 40 percent of world rice exports, on Thursday ordered a halt to its top rice export category, non-Basmati rice, to calm domestic prices, raising fears of global shortages.
Videos and reports shared on social media over the weekend show American Indians standing in long lines or buying rice in a panic 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 plans to make money to capitalize on the panic, according to Line of business.
“Some 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 shopper told the outlet.
India’s rice export ban has caused panic buying in 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.
Frontline reported that following the announcement of the ban, rice prices in the country increased on average by around 11 percent.
The PBS show claimed: “Unable to meet panic demand, the owner of a store that stocks Indian goods in the Ohio town of Mason enforced rationing by asking customers to restrict their purchase to one 20-pound bag of plain white rice per person, costing $24.”
The Indian government said the ban would take effect from July 20 and only ships currently loading would be allowed to export.
Parboiled rice, which represented 7.4 million tons of exports in 2022, is not included in the ban, the government specified.
Rice is a staple food for more than 3 billion people, and nearly 90 percent of water-intensive crops are grown in Asia, where the El Niño weather pattern typically brings less rainfall.
However, heavy rains in northern India in recent weeks have damaged newly planted crops in states including Punjab and Haryana, and many farmers have had to replant.
Rice fields in northern states have been submerged for more than a week, destroying newly planted seedlings and forcing farmers to wait for the waters to recede before they can plant again.
In other major rice-producing states, farmers have set up rice nurseries but have been unable to transplant seedlings due to poor rainfall. The rice-growing area was expected to increase after New Delhi raised the purchase price of rice, but so far farmers have planted rice on an area 6% smaller than in 2022.
“To ensure adequate availability of non-basmati white rice in the Indian market and to mitigate price increases in the domestic market, the Indian government has modified the export policy,” the Food Ministry said in a statement citing an 11.5 percent rise in retail prices over 12 months.
Frontline reported that following the announcement of the ban, rice prices in the country increased on average by around 11 percent.
The Indian government said the ban would take effect from July 20 and only ships currently loading would be allowed to export.
The move demonstrates the sensitivity of Prime Minister Narendra Modi’s government to food inflation ahead of next year’s general election. His administration extended the ban on wheat exports after halting rice shipments in September 2022. It also limited sugar exports this year due to falling sugarcane yields.
This week, prices for rice exported from Vietnam, the world’s third-biggest exporter after India and Thailand, spiked to their highest level in more than a decade on rising supply concerns due to El Niño.
Vietnam’s 5 percent broken rice was offered at $515-$525 per metric ton, the highest since 2011. India’s 5 percent parboiled variety hovered near a five-year peak at $421-$428 per metric ton.
Buyers may move to Thailand and Vietnam, but their 5 percent broken rice could cost $600 a metric ton, a European trader said.
China and the Philippines, which usually buy Vietnamese and Thai rice, will be forced to pay substantially higher prices, another European trader said.
While Thailand and Vietnam do not have enough inventories to cover the shortfall, African buyers would bear the brunt of India’s decision, Rao said, adding that many countries will urge New Delhi to resume shipments.
Other big 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 would in the wheat market with the invasion of Russia,” BV Krishna Rao, president of the Rice Exporters Association, told Reuters.
Last week, Russia halted a revolutionary wartime deal that allowed the flow of grain 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 put on hold until Russian food and fertilizer demands for the world are met. An attack Monday on a bridge connecting the Crimean peninsula with Russia was not a factor in the decision, he said.
