India has banned the export of broken rice and introduced an export duty of 20 percent on other types of cereals, in order to ensure the supply of citizens and mitigate the rise in prices on the domestic market caused by less planted areas due to weak monsoon rains.
India is the world's largest exporter of rice and sells it to more than 150 countries, so reduced supplies will increase pressure on food prices, which are already rising due to drought and Russia's war in Ukraine.
Below-average rainfall in India's main rice-producing regions, such as West Bengal, Bihar and Uttar Pradesh, has fueled production concerns, Hrportfolio reports.
India has already banned wheat exports and limited sugar shipments this year.
New Delhi on Thursday completely banned the export of broken rice, which was imported by a group of poor African countries, such as Senegal and Djibouti, for human consumption.
The biggest buyer was China, which imported 1,1 million tons last year, and mainly uses it for animal feed.
The government also introduced a 20 percent customs duty on the export of other types of rice, with the exception of partially cooked and basmati rice.
"Tariffs will affect white and brown rice, which account for more than 60 percent of India's exports," All India Exporters Association president Krishna Rao said.
As he said, due to tariffs, Indian rice will no longer be competitive on the world market, and buyers will shift to Thailand and Vietnam.
India accounts for more than 40 percent of global rice exports, and its competitors are Thailand, Vietnam, Pakistan and Myanmar.
"India's exports could drop at least 25 percent in the coming months due to tariffs," said CEO of India's largest rice exporter Satyam Balajee Himanshu Agarwal.
Exporters want the Government to provide some relief for already signed export contracts.
India's rice exports reached a record 21,5 million tonnes last year, more than the world's next four largest grain exporters combined - Thailand, Vietnam, Pakistan and the United States of America (US).
"Until now, India has been by far the cheapest rice supplier and this has to some extent shielded African countries like Nigeria, Benin and Cameroon from rising wheat and maize prices," said an unnamed Mumbai-based trader at a global trading firm.
He added that until now the prices of all agricultural products, except for rice, have been rising, and now it has also joined them.
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