IMF Chief Economist Urges Reversal of India’s Restriction on Rice Exports

New Delhi: Chief economist at the International Monetary Fund (IMF) Pierre-Olivier Gourinchas on Tuesday (July 25) said that India’s restriction on exports of non-basmati rice could exacerbate global food price inflation and should be reversed, the Business Standard reported.

Gourinchas, while addressing a news conference, said that the move would have a similar effect to the suspension of Ukraine Black Sea grain export deal and drive up grain prices in other countries, adding that they could rise by 10-15% this year.

“In the current environment, these types of restrictions are likely to exacerbate volatility on food prices in the rest of the world, and they can also lead to retaliatory measures. We would encourage the removal of these types of export restrictions because they can be harmful globally,” Business Standard quoted Gourinchas as saying.

India had banned the export of non-basmati rice last week owing to fears of a domestic shortage after late monsoon rains hurt paddy crops, the Economic Times reported.

On July 20, the government announced that it would restrict exports of non-basmati rice to calm domestic rice prices that had risen more than 30% since October 2022. The ban would halt overseas sales of the grain with “immediate effect” and is estimated to cover about 75%-80% of Indian rice exports.

India accounts for more than 40% of world’s rice exports, which amounted to 55.4 million metric tons in 2022. It shipped more rice than the combined shipment of the four next biggest exporters – Thailand, Vietnam, Pakistan and the United States – last year, the Economic Times report said.

Key buyers of Indian non-basmati rice include: Benin, Bangladesh, Angola, Cameroon, Djibouti, Guinea, Ivory Coast, Kenya and Nepal. Iran, Iraq and Saudi Arabia mainly buy premium basmati rice from India, the report said.

After the restrictions on rice export came into place, instances of panic buying and hoarding were reported in some countries, the Times of India reported. Some stores in the US, Canada and Australia imposed buying limits while others hiked prices to cash in on the frenzy of panicked buyers, the Times of India reported.