Indian Govt's Rice Export Ban Impacts US market: Businesses Make Hilarious Offers
On Thursday 20th July 2023, Indian government banned the export of non- basmati white rice with immediate effect triggering panic buying of the commodity in the US and other international markets.
To understand this cascading effect better on global markets let us familiarize ourselves with some facts about the global rice trade. India accounted for 22.2 million tonnes rice exports in 2022 which was over 40 percent of world’s total rice export at 55.4 million tonnes. This is more than the combined shipments of Thailand, Vietnam, Pakistan and the US - next four biggest global exporters of the commodity. It is also the world’s second largest producer of rice after China. According to analysts, rice production in 2023 will be lowest in the last 20 years resulting in the global rice shortage pegged at 8.7 million tonnes approximately for the year 2022-23.
The Government of India banned the export of non- basmati white rice with immediate effect from July 20, 2023. This decision has been taken in view of the continuous rise in rice prices in the past few months. Ministry of Consumer Affairs stated that ban would help control the price rise in the domestic markets and also ensure the adequate availability of the commodity.
Within hours of this decision, NRI community in the US, especially people hailing from south Indian states, got into the panic buying mode to hoard Sona Masuri, their preferred Indian variety of rice. There were long lines outside grocery chains like Patel’s which stock Sona Masuri. Taking advantage of the prevailing situation, some store chains, which regularly stock these Indian varieties, have already increased the price of a 20lbs bag of rice by $8. It has also led to a spate of hilarious consumer offers of Sona Masuri rice to entice Indian consumers. Some instagram users shared images of posters at some of the stores announcing that they have ‘restricted the purchase of only one bag of Sona Masuri rice per family with minimum $25 purchase of other grocery items to help every customer get access to Sona Masuri rice’. A real estate company offered ‘free 15 Sona Masuri rice bags (20lbs each) with any home purchase.
