New Delhi: The decision of the Indian government to ban rice exports has increased the risk of political instability in Asia and Africa, said Alvaro Lario, the head of the International Fund for Agricultural Development, a UN agency.
With India banning its rice exports in the second week of July, in a bid to arrest its rising domestic prices, the price of rice in the global market has soared to a 15-year high. India accounts for 40% of the global rice trade. The export ban by India, therefore, has come to affect nearly half of the world’s population, for whom rice is the staple food.
“Rice, especially in Africa, can certainly bring potential conflict or social unrest, which at this moment in time would be quite dangerous,” told Lario in an interview to Bloomberg.
“Export bans have a lot of impact, especially on the most vulnerable, by raising prices and having a shock on prices,” he said. “Generally they are not positive, neither for the local populations in the medium term, nor for the other countries.”
He lamented that some regions in Africa that are more dependent on rice imports are already witnessing adverse impacts due to higher prices. “We have to understand that many of these people who consume this type of crop are sometimes on the brink of poverty,” he noted.
While saying that the impacts of bans “go beyond the borders of the countries”, he added that rice is the “main concern” for security, much more than wheat.
On July 20, India’s Directorate of Foreign Trade issued a notification, banning exports of non-basmati white rice “with immediate effect”. “In order to ensure adequate availability of non-basmati white rice in the Indian market and to allay the rise in prices in the domestic market, the Government of India has amended the Export Policy of the above variety from ‘Free with export duty of 20%’ to ‘Prohibited’ with immediate effect,” the notification had said. “Domestic prices of rice are on an increasing trend. Retail prices have increased by 11.5% over a year and 3% over the past month.”
In fact, India’s decision came close on the heels of Russia stating that it would not participate in the Black Seas Grain Initiative, resulting in huge anxiety in the global market and consequent rise in food prices worldwide.
The export ban by India is reminiscent of 2008 when the world witnessed a global rice crisis, putting the lives of 100 million people at risk. Mostly, populations living in sub-Saharan Africa were the worst affected. The crisis was spawned by the decision of India and Vietnam to restrict their rice exports. Food shortages and surging prices had also contributed to the political unrest in the Middle East leading to the Arab Spring, which led to the dislodging of several governments in the region.