Data | Why India’s rice export ban impacts Asian and African nations the most

Panic-stricken Non-Resident Indians (NRIs) in the United States rushed to grocery stores and supermarkets to hoard bags of rice, specifically sona masuri rice, after the Indian government’s decision to ban the export of non-basmati white rice. The ban aimed to ensure adequate availability and control rising prices in the Indian market. Many stores in the U.S. placed limits on rice sales, causing long queues and chaos. Non-basmati white rice had been the most exported type of rice from India, with over 140 countries buying it in the last fiscal year. The ban will particularly impact countries like Nepal, Bangladesh, various African nations, and Asian countries like Malaysia and Vietnam, which were major buyers of this rice type. The U.S., while affected by the ban, ranked 34th in terms of rice imports from India and is less dependent on Indian rice compared to Nepal and other countries.

In the last couple of days, many panic-stricken Non-Resident Indians (NRIs) have thronged grocery stores and supermarkets in the United States to hoard bags of rice. Videos of people jostling to buy sona masuri rice (a lightweight and aromatic medium-grain rice) and photos of long queues outside Indian stores became viral on social media. In order to control the chaos, many stores in the U.S. placed a limit on the sale of rice. Some even restricted sales to ‘one rice bag per family’ to deal with the unprecedented crowds.

This sudden rush followed the Indian government’s decision on July 20 to ban the export of non-basmati white rice to “ensure adequate availability in the Indian market and to allay the rise in prices in the domestic market.” It did not restrict the export of the other types of semi/wholly milled rice — basmati and parboiled rice.

The exported share of non-basmati white rice surpassed the share of basmati rice in the last two fiscal years (Chart 1). In FY23, India exported around 64 lakh tonnes of non-basmati white rice and close to 45 lakh tonnes of basmati rice. The most widely exported type was parboiled rice (78 lakh tonnes). Now, non-basmati white rice, which formed over a quarter of semi/wholly milled rice, has been taken off the market.

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Over 140 countries bought non-basmati white rice from India in FY23. The effect of the ban will be most pronounced in the neighbouring countries of Nepal and Bangladesh, the African countries of Madagascar, Benin, Kenya, and Ivory Coast, the Asian countries of Malaysia and Vietnam, and the UAE, which are all the biggest buyers of this type of rice in absolute terms (Chart 2).

Chart 2 shows the average quantity of non-basmati white rice bought by the top 50 importers per year between FY19 and FY23.

Interestingly, the U.S. is ranked 34th on the list, with just over 27,000 tonnes of average imports per year. In contrast, Nepal bought 4.5 lakh tonnes per year in the considered period. Thirty three other countries are more impacted by the ban than the U.S. So, the hullabaloo over rice in the U.S. can be explained as a reporting bias.