What’s Going on With Rice Imports in the U.S.?
A supply chain issue is back in the news after India banned the export of non-basmati white rice. It’s not at the level of the early-pandemic run on toilet paper or the 2022 shortage of baby formula, but the holdup is causing concerns among consumers around the world, including in the United States. It is estimated that India exports 10 million tons of non-basmati and “broken” rice on an annual basis.
In its July 20 statement, India’s Ministry of Consumer Affairs, Food and Public Distribution announced that the decision was in response to weather-related impacts on production: “In order to ensure adequate availability of non-basmati white rice in the Indian market and to allay the rise in prices in the domestic market, Government of India has amended the Export Policy of above variety from ‘Free with export duty of 20%’ to ‘Prohibited’ with immediate effect.”
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The move was taken to curb high domestic prices in that country as supplies could be squeezed due to monsoon-damaged crops. The Indian government’s action, though, may end up raising demand – and hence prices – in other markets.
One trade expert noted that the action will have ramifications. “India would disrupt the global rice market with far greater velocity than Ukraine did in the wheat market with Russia’s invasion,” B.V. Krishna Rao, president of the Rice Exporters Association, told the Reuters news service.
Some shoppers in the United States are already stocking up, especially those who frequent Indian grocery stores. According to a report in the magazine Frontline, published by The Hindu, an Indian grocer in Ohio reported that it is now limiting purchases to one 20-pound bag of regular rice after basmati and other rice varieties from India sold out after the ban went into effect.
In mid-July, the U.S. Department of Agriculture (USDA) reported that it raised the 2023-2024 U.S. rice production forecast by 4% to 201.million cwt (hundredweight) and lowered the total import by 1.0 million cwt to 38.0 million. That import figure is still the second highest on record, USDA noted.
