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Ban on India’s rice exports can increase global food prices: IMF

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Pierre Olivier Gourinchas, Chief Economist and Director of IMF said that the restrictions laid by India to stop exporting certain types of rice will likely affect food prices for the rest of the world. “And they (the ban on rice exports) can also lead to retaliatory measures. So, they are certainly something that we would encourage the removal of these types of export restrictions because they can be harmful globally,” he said in a press conference on Tuesday.

India’s embargo on rice exports occurred shortly after Russia announced its withdrawal from the Black Sea grain agreement that was mediated by Turkey and the United Nations. The IMF Chief said that the initiative was vital in making sure that grain supply to the world does not take a hit. “Estimates of about 33 million tons of grain were shipped from Ukraine to the rest of the world. And it helped keep the price
pressures on food and grain prices lower,” Gourinchas said.

The non-basmati white rice is now classified as “prohibited” under changes made to the rice export regulations by the federal government last Thursday. The non-basmati white rice export policy was changed from “free” to “prohibited” and went into effect immediately. The effects of ban on the rice exports have already been unsurfaced in the USA where customers are experiencing white rice shortages in almost every store.

A customer spent the whole day looking for a bag of white rice and when she finally got one, she had to pay triple the price for one single bag of rice. The majority of the shortage people in America are facing come from cities that are home to a sizeable Indian population. Bobby Hanks, chair of the USA Rice International Trade Policy Committee criticized this decision taken by the Indian authorities. He said, “This is just another example of India playing games with global food security, citing concerns over domestic supplies despite tens of millions of metric tons in government stocks in addition to what’s stored privately.”

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