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Sriram Ramamurthy, Manager of Iqbal Halal Foods in Toronto, says customers have been stockpiling rice after India moved to ban export on non-basmati rice. (Nisha Patel/CBC)
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India’s decision to ban the export of non-basmati rice has led to consumers panic-buying and stockpiling Indian rice around the world, driving up prices in the process.
In Canada, the U.S. and abroad, reports of panic-buying are flourishing on social media, with stores that cater to South Asian communities implementing caps on the amount that any customer can buy, and adjusting prices.
Sriram Ramamurthy, the manager of Iqbal Halal Foods in Toronto, told CBC News in an interview Monday that he saw an immediate increase in demand for rice once word of the ban spread on Thursday of last week.
“They started coming in here and they wanted to buy more and more,” he said. He soon implemented a limit of one bag per customer, but that quickly proved futile as customers would come back with more family members, “each one trying to pick two or three at a time.”
Some customers would even approach other customers in line who were not buying rice, trying to get them to purchase it on their behalf, he said.
Ramamurthy says he carries more than 40 different brands of rice in his store, mostly from India, but the majority of what he sells is basmati rice, a premium grade of rice that isn’t even included in the export ban.
But that hasn’t stopped customers from trying to buy up every grain they can, of basmati and varieties included in the ban, just in case, he said.
Siraj Mohammed said he heard about the ban, so decided to come “down to the grocery store expecting that this is not gonna be the case in Canada. But I guess the worst happened,” he said. He prefers one specific type of basmati rice, one that the store doesn’t have any more of right now. “Now I’m not going to be able to get my hands on it, I guess.”
Ramamurthy says he hasn’t raised his prices yet, but he’s expecting his suppliers to soon. Stores that cater to the South Asian market elsewhere in Canada are reporting similar scenes, including Savor Supermarket in Saskatoon, where purchases are being limited.
Stores in the U.S., Australia and elsewhere are also seeing unprecedented demand, Bloomberg and others reported Tuesday, although CBC News has not been able to independently verify the authenticity of videos showing hoarding and panic buying.
India has taken the extraordinary step in order to ensure domestic supply, and bring down prices, which have soared due to excess rains and drought in rice-producing regions.
According to government data, the domestic price of non-basmati rice has increased by almost 10 per cent this month. In September of last year, a metric tonne of non-basmati rice in India would cost about $330 US. Today it tops $450, according to pricing in the most-traded Indian rice futures contract.
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Stores have started to ration bags of rice after India’s move to ban imports prompted stockpiling. (Nisha Patel/CBC)
Sophia Murphy, executive director for the Minneapolis-based Institute for Agriculture and Trade Policy, says rice is such a staple for India and its 1.2 billion people that the government manages supply closely. Unlike other food commodities, she says the global rice market is very domestically oriented, as less than 10 per cent of all the rice in the world ever crosses a border.
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While India is far and away the world’s largest exporter of rice, with more than 40 per cent of international trade in it, their primary concern is maintaining domestic supply, which is why they have had export bans in the past, she says.
“If they ban or someway limit the exports, it should keep more production in the country and it should reduce the inflation pressure that is there on food prices,” she said.
Canada imported about $650 million worth of rice last year, according to government data. Within that, about $140 million came from India — and only a tiny percentage of that is of the small- and medium-grain varieties of non-basmati rice that the ban applies to.
Murphy says while supply of basmati may also be strained, the government did not move to ban exports since it is a more premium product. Local concern is on the other staple varieties, which is why the government used the dramatic step of halting exports.
“Bans are easy to explain to the public,” she said, “we’re not selling food abroad, we’re looking after people at home. It’s often a pretty blunt — not necessarily very effective — instrument but it has domestic political capital associated with it.”
India’s move to ensure domestic supply is the second major announcement from a major exporter this year, as in May Vietnam announced plans to limit its own exports to four million tonnes a year by 2030. That’s down from more than seven million tonnes a year right now, and it’s aimed at “ensuring domestic food security, protecting the environment and adapting to climate change,” the government said in a release.
In recent years, India has emerged as one of the largest exporters of rice, a staple crop that feeds millions around the world. However, a significant shift occurred when the Indian government implemented a sudden ban on rice exports, leaving many nations, including Canada, struggling to cope with the repercussions. This article delves into the reasons behind India’s decision to ban rice exports and explores the far-reaching consequences it has had on the global rice market. From shortages in Canada to stockpiling on a global scale, the implications of this decision have reverberated through economies and food security networks worldwide.
India’s agricultural sector plays a pivotal role in its economy, with rice being a crucial crop cultivated across vast regions. Over the years, India’s rice production has increased significantly, making it one of the leading exporters in the world. The country’s abundance in rice production had allowed it to cater to the growing demand from various countries, especially those facing food crises and shortages.
In the midst of India’s success as a major rice exporter, an unforeseen event led to a shift in the country’s policy towards its rice surplus. A combination of factors such as extreme weather events, changing agricultural policies, and internal consumption demands culminated in a decision by the Indian government to impose a ban on rice exports.
With India being a prominent supplier of rice to Canada, the sudden export ban left the Canadian market in a state of shock. As Canadian importers and distributors heavily relied on Indian rice imports, the shortage created a void in the market, resulting in a surge in rice prices and concerns over food security.
Beyond Canada, numerous nations around the world were heavily reliant on India’s rice exports. The ban sent ripples through the international rice market, prompting countries to explore alternative sources to meet their domestic demands. This shift caused stockpiling of rice in various regions and exposed vulnerabilities in global food supply chains.
The rice export ban also raised questions about the implications of international trade agreements and the need for diversification in sourcing. Countries that were parties to trade agreements with India had to reassess their agricultural policies and renegotiate terms to adapt to the sudden change in the supply chain.
In response to the crisis, countries like Canada began to focus on ramping up domestic rice production to reduce their reliance on imports. However, this transition required substantial investments in agriculture, infrastructure, and technology, and its effectiveness faced limitations due to geographical and climatic factors.
For countries that lacked the resources to boost domestic production or diversify their sourcing, the rice export ban resulted in dire humanitarian consequences. The global food aid networks faced challenges in delivering sufficient quantities of rice to those in need, exacerbating existing food insecurity issues in vulnerable regions.
With the export ban driving increased cultivation in other rice-producing nations, concerns arose over its impact on biodiversity and ecosystems. The expansion of rice cultivation could lead to deforestation, loss of wildlife habitats, and potential threats to indigenous communities.
As nations scrambled to secure rice supplies, speculation in the rice market became a prevalent issue. Traders and investors sought to capitalize on the growing demand, leading to further price volatility and potential market manipulation.
In the wake of the rice export ban, the global rice market underwent significant transformations. Nations were forced to reevaluate their agricultural policies, implement innovative farming practices, and foster international collaborations to ensure a stable and sustainable food supply in the long term.
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The government of India has banned the export of non-basmati white rice, saying it will help keep prices down domestically and improve availability there. But in Saskatchewan, local South Asian grocery stores are already seeing panic buying.
“We had some 400 to 500 packets of non-basmati rice on Friday before the news broke out but people are getting crazy for non-basmati rice. We have very few left,” said Arshpreet Singh, store manager at Savor Supermarket in Saskatoon.
“Many people from the Indian community are panicking and they came here, panicked for Sona Masoori rice, Poni raw rice. On Friday, many took five to ten packets.”
Now, Singh said the store has decided to limit sales to two bags of rice per family.
India is the largest exporter of rice in the world, accounting for 40 per cent of the global rice trade. India made the move to curb the price rise of non-basmati white rice at home. Retail prices have reportedly increased by 11.5 per cent in the past year. Just in the past month, prices shot up three per cent after delayed but significant monsoon rains caused substantial damage to crops.
As per Statistics Canada, since January, Canada imported $45 million worth of long grain or basmati rice from India. But the ban is on small- and medium-grain or non-basmati rice, which accounted for almost $3 million in imports.
“All the non-basmati rice seem to be banned for six to eight months. We asked the suppliers when we would get the shipment — they said they don’t have any idea,” Singh said.
He urges customers not to stockpile and wants the Indian government to lift the ban soon.
At Swadesh Supermarket in Saskatoon, store owner and manager Jameel Ahmead just had one bag of five-kilogram non-basmati rice left on his shelves as of Monday evening.
“I had 50 bags on Saturday and within 30 minutes of opening the store, they all were gone. Sunday was a similar story,” Ahmead said.
“Customers were panicking, filling up their carts with sacks of rice.”
He said over the weekend, all 10-kilogram non-basmati rice bags were sold. Ahmead said he never saw anything like it.
Saskatoon resident Madhura Ghaskadvi also went looking. She could not find any non-basmati rice, so brought home two packets of basmati rice fearing its imports might also get impacted.
“Many of my friends and people I know in the community have been panicking about this news,” she said. “I hope this improves sooner than later.”
In Regina, panic buying was evident at Foodomix, which supplies Indian groceries. Sam Pat, the owner, said people have been grabbing multiple bags. Now, the store has limited it to one bag per family.
“In South Asian communities, rice is one of the staple diets. This might inflate the prices with increased demand,” Pat said.
“The panic is right now as we don’t know how long the ban will last. Vendors are not giving us any timelines. The panic is because there is no clear communication on how long it would take to have the proper flow in the market.”
Shafeeq Meer, owner of the Biryani Box in Saskatoon, said inflation was already causing enough stress.
“Now, with this new move, the other people will start consuming basmati rice and we make biryani with basmati rice. It’s going to affect our business a lot,” he said.
“Ninety per cent of our business is with rice and we are thinking about what we should do. Should we raise prices? How will it impact our customers?” he said.
With uncertainty lingering around supply, Meer said he and other small business owners are concerned about the next steps.
“It’s definitely going to take our sleep from nights.”
The ban on India’s rice exports had far-reaching implications beyond its borders, leaving countries like Canada grappling with food shortages and rising prices. The incident underscored the interconnectedness of the global food trade and the importance of proactive policies to ensure food security for all. As nations continue to navigate the aftermath of this crisis, it serves as a reminder of the need for robust contingency plans, sustainable agricultural practices, and international cooperation to address food crises effectively. Only through collective efforts can the world mitigate the impact of such disruptions and safeguard the well-being of its population in the face of unforeseen challenges.