India bans rice exports as prices rise regionally

India yesterday prohibited the export of non-basmati rice, in an attempt to control food prices and maintain strong stockpiles, while the world price has doubled in three months, and in March alone rose from 650 to 1,000 dollars per tonne, a 25-year record. The country has also extended the ban to the export of legumes.

The price of exported basmati rice ("the Queen of Fragrance" in Hindi, a characteristically Indian variety, long-grained and highly prized although with lower demand inside the country) has been raised from 1,100 to 1,200 dollars per tonne, to discourage exports.

The country has had to import wheat for two years, because of dwindling stockpiles, and wants to avoid having the same thing happen with rice. In order to contain inflation - at its highest level since June of 2006 because of rises in food, oil, and metal prices - it has also lowered tariffs on imported food oil.

India is the second leading rice producer after China, and exports more than 4 million tonnes per year. For this reason, it is now feared that there will be further strong price rises in the grain, a staple food for half the world population, above all for the poor and for Asian populations.

In recent weeks, Vietnam (the second leading exporter, after Thailand), Egypt, and Cambodia have limited rice exports, and Thailand is considering limits. The producers and large scale traders, especially the private ones, have in practice already halted sales, partly in expectation of further price rises.

In China, the price of rice had been frozen, in order to contain the increase in food prices (+23.3% in February). But now the commission for national reform and development has announced higher prices for rice and wheat, in order to prompt farmers to produce larger and higher quality crops.

There is great concern in Hong Kong, which gets 90% of its rice from Thailand: premier Wen Jibao had to issue a statement assuring that the government has "an abundant supply". In China, average rice consumption has risen from 20 kilograms per capita in 1985 to 50 now, and in 2007, the country had to import 471,000 tonnes.

The emergency is also the consequence of the extensive use of farm land for industrial or residential purposes, and of widespread pollution, especially in China and India, which has made vast areas unusable, or has made crops unsafe.

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