India may impose export tax on rice

India, the world's largest rice exporter, is considering further measures to restrict rice exports as domestic food prices rise.

Bloomberg , citing sources close to the matter, reported that the Indian government is considering imposing an export tax on parboiled rice, a type of rice that is partially cooked while still in its husk. However, no official decision has been made yet.

Rice prices in Asia have reached a 15-year high after India announced last month a ban on exports of non-Basmati rice varieties (a popular South Asian rice) and Thailand faces the risk of reduced production. The Indian government is seeking to cool domestic food prices ahead of early elections next year.

Workers stack rice in a market in Mumbai, India. Photo: Reuters

India is currently grappling with inflation, as prices of many food items, fruits, and vegetables have soared. Besides banning exports of certain types of rice, they have also restricted sales of wheat and sugar. The South Asian nation is considering waiving the 40% import tax on wheat and selling tomatoes and grains from national reserves to improve domestic supply.

Rainfall in many of India's key rice-growing states, such as West Bengal, Uttar Pradesh, Jharkhand, Bihar, Chhattisgarh, and Andhra Pradesh, is currently 15% less than in previous years. This has raised concerns about rice supply. Rice is India's biggest harvest during the monsoon season.

Rice is now a staple food for billions of people in Asia and Africa, contributing 60% of their total daily energy intake. In some countries, such as Bangladesh, this figure even reaches 70%.

Therefore, analysts warn that the recent price increases will put further pressure on the budgets of people in Asia and Africa, amidst a global food market already reeling from extreme weather and the Russia-Ukraine conflict.

Ha Thu (according to Bloomberg)

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