Business & Economy

India tightens exports of basmati rice to control domestic prices

New Delhi, Aug 27 (EFE).- India has tightened restrictions on rice exports on Sunday with limits on foreign sales of basmati rice in addition to a ban on trade of other rice varieties.

The announcement comes after the Indian government moved to ban international exports of non-basmati white rice last month claiming domestic reasons such as high inflation, fears of local shortages and rising food prices.

Among the new measures announced by the Ministry of Commerce and Industry is a ban on exports of fragrant basmati rice priced below $1,200 per metric ton in a bid to curb international trade of Indian-grown grain.

“The Government has received credible field reports regarding misclassification and illegal export of non-basmati white rice, export of which has been prohibited with effect from 20th July 2023,” the ministry said in a statement.

“It has been reported that non-basmati white rice is being exported under the HS codes of parboiled rice and Basmati rice,” it added.

This week, India imposed a 20% tax on exports of parboiled rice, while the sale of broken rice was banned last September.

According to official data, rice exports from the Asian country have continued to grow despite fresh measures with some 7.3 million metric tons so far this year compared to 6.7 in the same period in 2022.

India is the world’s leading rice exporter.

In 2022 alone, the Asian country sold 22.3 million metric tons of rice abroad for some $11.1 million. These sales were of mostly nonbasmati rice varieties.

A spike in international prices caused by lower production levels in rice producers like Thailand has contributed to soaring rice global prices, which this year have recorded the highest prices since 2011, according to the United Nations-backed Food and Agriculture Organization.

India imposed a surprise veto on rice exports of non-basmati rice on July 20 “to ensure adequate domestic availability at reasonable prices,” the Directorate General of Foreign Trade said.

The Reserve Bank of India warned of soaring food prices earlier this month and said that some commodities such as tomatoes were surging by over 300% their usual cost which stoked inflation to 4.8% in June.

India’s export veto has triggered fears global inflation could rise further, and organizations such as the International Monetary Fund (IMF) have called on New Delhi to end the veto. EFE


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