IMF urges India to lift rice export ban; meanwhile, panic buying seen in US stores

The International Monetary Fund (IMF) has called upon India to remove the ban on non-basmati white rice exports, citing potential adverse effects on global food prices. The Indian government had imposed the ban on July 20 to bolster domestic supply and stabilize retail prices ahead of the festive season.

Pierre-Olivier Gourinchas, Chief Economist of IMF, expressed concern that such export restrictions could exacerbate food price volatility worldwide. He stressed the importance of removing these limitations promptly to mitigate global implications.

Meanwhile, the ban has led to panic buying among Indians residing in the United States. Grocery stores run by the Indian community have reportedly hiked rice prices to exploit the situation. An NRI mentioned that a 9 kg bag of rice, which previously cost $15-16, now costs a whopping $46.99.

The situation has escalated further, with some desi grocery shops coercing customers into purchasing additional items worth $35-$50 to acquire a single bag of rice. Frontline reported an overall rise of around 11% in rice prices across the US.

Videos showing people frantically stockpiling rice, particularly sona masuri variety, have gone viral on social media. While their authenticity remains unverified, CNBC-TV18 independently confirmed the onset of hoarding in multiple states, including California, Chicago, New Jersey, and parts of Canada.

The ban's impact on the North American market has been notable, with the region importing 64,330 tonnes of non-basmati rice from India in 2022-23. India's diaspora markets in the Gulf countries and Europe have also been affected, with 6.95 lakh tonnes and 73,000 tonnes imported, respectively.

India's total non-basmati rice exports reached 17.78 million tonnes in 2022-23, up from 17.26 million tonnes in the previous year. However, the ban threatens to disrupt the country's export trajectory.

On Tuesday, IMF projected India's growth rate to reach 6.1% for fiscal year 2024, slightly higher from the 5.9% projected earlier.

Also Watch: IMF projects Indian economy to grow at 6.1% in 2023

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