India eases rice export ban on four African nations

India has permitted the export of 1.34 million tonnes of non-basmati white rice to seven countries, including four in Africa – a move that may ease the food price inflation. It will now supply 190,000 tonnes to Cameroon, 142,000 tonnes each to Côte d’Ivoire and Guinea, and 800 tonnes to Seychelles. The waiver was granted on humanitarian grounds – however it is uncertain whether this is a one-off exception or sets a precedent for future allowances. Several African nations are heavily dependent on rice imports from India. For instance, last year, Togo sourced a substantial 88% of its rice from India. Benin, the largest global importer of Indian broken rice, procured 61%, while almost half of Senegal's imports of the grain originated from India. In 2021, before the export restrictions, three African nations were among the top 10 markets for Indian rice. Benin was the fifth-largest destination, purchasing rice valued at US$454m. Senegal followed with purchases totalling US$335m, and Côte d'Ivoire, ranking tenth, bought US$318m worth of Indian rice.

In July, India suspended exports of non-basmati white rice. The subsequent month saw the introduction of a minimum sale price for basmati rice, coupled with a 20% tariff on parboiled rice. These measures followed a decision in September of the prior year to prohibit the exports of broken rice – a more affordable variety popular in less affluent nations, especially in Africa. The decision was driven by concerns over food price inflation at home. Food inflation has become a pressing issue for Indian Prime Minister Narendra Modi, who faces a national election next year. Indian export curbs have contributed to a significant surge in rice prices in Africa, which went up 38.8% in Sep over the same period previous year. While many African nations are taking steps to boost domestic rice production, immediate relief appears unlikely. In Nigeria, where the grain is a staple and essential to its national dish, jollof rice, the price for 1kg of rice was 46.34% higher in August compared to the same month a year earlier.

As traders from other rice-producing countries seek to fill the void left by New Delhi, there have been fears that these nations too may introduce similar measures to guard against potential domestic shortfalls and spiralling inflation. Already, Myanmar, the world's sixth-largest rice exporter, has implemented new export licensing stipulations, and the Philippines introduced price ceilings for retail rice. Although the Association of Southeast Asian Nations (ASEAN) – which boasts three of the world's top five rice exporters – has pledged to abstain from using "unjustified" trade barriers, they recently agreed to prioritise rice supply to fellow members of the trade bloc.

Such protectionist measures pose a grave risk to countries in West Africa. Cheikh Bamba Ndaw, the director of interior trade for Senegal’s ministry of trade, conveyed to the Financial Times that while Senegal maintains reserve stocks, persistent import restrictions and elevated prices might compel the country to seek alternative rice varieties from Brazil or the US. These options are notably costlier than Indian rice. Such a shift could render rice unaffordable for many, potentially thrusting the nation into a food crisis.

 

References

‘Domino effect: India rice export ban puts market on edge for copycat curbs’, Reuters, 11 August 2023

‘ASEAN nations to prioritise members' rice needs, Malaysia state news agency reports’, Reuters, 07 October 2023

‘India allows non-basmati white rice exports to some countries amid ban’, India Today, 18 October 2023

‘India to export limited quantity of white rice to seven countries’, Mint, 18 October 2023

‘India lifts ban on rice export to seven countries including Côte d’Ivoire, Cameroon, Guinea, Seychelles’, The North Africa Post, 20 October 2023

‘The return of the rice crisis’, Financial Times, 23 October 2023

‘List of importing markets for a product exported by India – Product: 1006 rice’, International Trade Centre, Accessed 28 October 2023

‘AMIS Market Monitor’, Agricultural Market Information System, October 2023