India has made it illegal to ship white rice that is not basmati in an effort to stop prices from going up at home.
Heavy rains have hurt crops in the country, and in the last 12 months, the price of rice has gone up by more than 11%.
The Ministry of Consumer Affairs said that about a quarter of India’s rice exports are non-basmati white grain at the moment. This is why the policy is changing.
Experts worried that the move could raise food prices around the world.
Emma Wall, who is in charge of financial analysis and research at Hargreaves Lansdown, said, “It’s safe to say that this will have a big effect on food prices around the world.”
After Russia pulled out of a deal this week that guaranteed the safe passage of Ukrainian grain, like wheat, food supplies are already tight.
India is the biggest producer of rice in the world, sending out more than 40% of all rice that leaves the country. Most of the rice that isn’t basmati is sent to countries in Asia and Africa.
The Indian government put a 20% tax on exports last year to try to stop sales to other countries. It has also cut back on sales of wheat and sugar.
But Indian farmers can make more money by shipping than by selling their goods in India.
The government said that farmers could still export other types of rice, like long-grain basmati, so that they could “get good prices on the international market.”
The Directorate General of Foreign Trade said that the state will also think about requests to ship to other countries based on the need to make sure there is enough food.
Last year, the attack of Ukraine caused food prices around the world to go up.
Even though these stresses have eased internationally, bad weather has hurt crops in many northern states of India. This has caused the prices of many things, like tomatoes and onions, to go up sharply.
From May to June, the prices of vegetables went up by 12%, which added to the rising cost of living. Last month, inflation went up to 4.8%, which was more than expected because food prices were going up.
India’s government has been put under political pressure by the rising cost of living. This is because national elections are coming up next year. In the coming months, there will also be votes for state governments.
An expert on India’s agricultural policy, Devinder Sharma, said that the government was trying to get ahead of a production gap that was expected. Sharma said that rice-growing areas in the south were also at risk of dry rain as the El Nino weather pattern moved through this year.
He said, “The government is taking a very, very cautious approach.”
