India, however, acknowledges that they may consider government-to-government arrangements for rice exports to address food security concerns. This move could potentially give India significant influence over the fate of millions in developing countries, raising concerns about dependence on India’s decisions in the future
in response to usa
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Contents
Overview
NEW DELHI, INDIA – Recently, the Government of India declared a ban on exporting non-basmati rice, citing concerns about domestic production. This move could impact as much as 80 percent of India’s rice exports and has raised worries about global food security.
Nearly 10 months ago, India had implemented a ban on broken rice and imposed an export tariff on non-basmati and non-parboiled rice. Despite these restrictions, India managed to surpass its own export record, shipping 22.5 million metric tons of rice. Additionally, the USDA Grain: World Markets and Trade Report projected a further increase in Indian rice exports to a record 23 million metric tons in 2023-24, indicating excess domestic supplies. B.V. Krishna Rao, president of India’s Rice Exporters Association, conveyed that the government holds more stocks than necessary for welfare schemes, suggesting there is no need to restrict exports.
However, the ban comes amidst challenges faced during India’s kharif (monsoon season) crop planting due to uneven rainfall, resulting in a rise in domestic rice prices and other commodities. The Indian government justifies the radical ban as an attempt to control domestic rice prices. Notably, similar bans in 2007 and 2008 had led to soaring world rice prices and exacerbated food insecurity in countries relying heavily on rice imports.
How USA responded ?
Bobby Hanks, a Louisiana rice miller and chair of the USA Rice International Trade Policy Committee, expresses concerns about India’s actions impacting global food security. Despite substantial government and private rice stocks, India’s inconsistent behavior raises questions about its commitment to responsible practices. Hanks alleges that India might use the ban as an opportunity to build stocks and eventually dump rice back into the world market at cheap prices, perpetuating the cycle.
Hanks further criticizes India’s proposal for permanent protections for public stockholding schemes to avoid a World Trade Organization (WTO) dispute. The fear is that such behavior encourages food insecurity, as India appears to protect its domestic prices when convenient and exploit artificially low-priced exports when it suits them, disregarding the consequences for global trade balances and food security.
In response to India’s ban, Kirk Satterfield, a Mississippi rice farmer and chair of USA Rice, calls on the Biden Administration to take action and initiate a case against India at the WTO through a formal request for consultations.
India, however, acknowledges that they may consider government-to-government arrangements for rice exports to address food security concerns. This move could potentially give India significant influence over the fate of millions in developing countries, raising concerns about dependence on India’s decisions in the future.
The situation remains a matter of intense concern for global food security and raises questions about the implications of India’s actions on the international rice trade.
What Will be The Impact of Rice Ban ?
In the vast expanse of the United States, a profound shift was unfolding that reverberated through the hearts and homes of the large NRI (Non-Resident Indian) community. The government’s decision to impose a ban on rice imports had sent ripples of concern throughout this diverse and vibrant diaspora. As the news spread like wildfire, whispers of worry echoed across living rooms, community centers, and virtual gatherings. The once plentiful and cherished rice, a staple that held cherished memories of ancestral homes and flavors, now faced an uncertain fate.
The NRI community found itself grappling with thoughts of an altered culinary landscape and the impending challenge of sourcing rice locally. Would the shelves of their neighborhood grocery stores still bear the beloved bags of rice, or would they face the dreaded possibility of scarcity and escalating prices? Apprehension filled the air, and in response, a feverish urgency to secure their precious grain ignited within the hearts of many.
Across cities and towns, a subtle frenzy unfurled in the aisles of local markets. The pursuit of rice became akin to a treasure hunt, as community members flocked to grocery stores with a newfound determination. Rice bags, once unassumingly stacked on shelves, now became prized commodities, cradled like precious gems in shoppers’ hands. To safeguard against an uncertain future, some resorted to buying in bulk, heeding the age-old adage of stocking up for a rainy day.
Local grocery store owners couldn’t help but notice the tides of change sweeping through their businesses. A surge in demand for rice was evident, marking a stark contrast from the casual purchases of the past. The echoing sound of clinking bags and the soft hum of hushed conversations filled the air, as the NRI community rallied to secure a piece of their cultural identity.
Amidst the bustling scenes and swirling emotions, tales of nostalgia and resilience emerged. Stories were exchanged over the checkout counters, of how rice had long been an emblem of unity and shared tradition. But now, it had become a symbol of determination, binding together a scattered community in the face of unforeseen challenges.
As days turned into weeks, the true impact of the rice ban continued to unfold, and the NRI community stood united, braving the winds of change. In the warmth of their kitchens, they cooked each grain with love and cherished memories, and in every shared meal, they found a sense of belonging and hope. Through this seemingly simple grain, the NRI community had reaffirmed their deep-rooted connection, proving that the ties that bound them to their heritage and to each other were unyielding, resilient, and enduring.
How will Rice Ban of India On USA Benefit To Domestic Market ?
The decisive action taken by the Centre to ban exports of non-basmati white rice on Thursday is projected to lead to a substantial reduction in India’s rice exports by 4-5 billion tonnes this fiscal year. This accounts for over a fifth of the total rice exports from the previous fiscal year, as reported by the esteemed rating agency Crisil.
Pushan Sharma, director-research, Crisil Market Intelligence and Analytics said “Despite two curtailing moves last fiscal — a ban on broken rice exports, and 20% duty on non-basmati exports – India’s overall rice exports rose 5-6% even as overall production fell. To boot, as of July 1, 2023, rice stock with the Food Corporation of India is down a fifth on-year.The consequent tight supplies meant domestic prices rose 14-15% last fiscal.”
He added “The government clearly viewed these as red lines from a domestic food security and inflation point of view. We expect Thursday’s blanket ban to reduce India’s rice exports by 4-5 billion tonne this fiscal, or more than a fifth of what was exported last fiscal. That should improve domestic supplies and have a moderating effect on retail prices.
Reason , Why India Bans Export of Non Basmati Rice to USA?
India, being the world’s foremost exporter of rice, has recently taken a decisive and imperative measure by implementing a complete prohibition on all exports of non-basmati white rice. The rationale behind this momentous decision is to effectively stabilize and regulate domestic prices, which had surged to unprecedented multi-year highs primarily due to the adverse effects of erratic weather patterns that severely threatened rice production. The monsoon season inflicted substantial damage to the crops, thereby instigating genuine concerns about the potential scarcity of non-basmati rice in the local market, which, in turn, poses a significant risk of further price escalation. In light of these circumstances, the imposition of the export ban is a paramount step to safeguard the interests of the nation and ensure an adequate supply of rice for its citizens during these challenging times.