Fallouts from imposition of duty on Indian rice

The repercussion of slapping by India a 20 per cent duty on export of parboiled rice is likely to be far and wide. Accounting for more than 40 per cent of the world's rice export, the number one global rice exporter has by now imposed restrictions on all kinds of non-basmoti rice which poor consumers in Asia and African usually prefer. This latest Indian move is sure to trigger another round of price hike in the global market and limit the staple's availability. The Indian government of Narendra Modi has been imposing duties on food commodities one after another in order to avoid domestic food inflation ahead of the next year's election. Earlier it banned export of broken rice and non-basmoti white rice, triggering the UN food agency's rice price index soar to the highest level in 12 years. These bans were in tandem with the extension of ban on wheat export and curb on sugar export as well.

The consequences are grim. Because other countries with smaller inventories cannot fill up the supply gap in the global market. Thailand, Myanmar and Vietnam have also raised prices of rice or/and following the Indian example. A shrinking global rice market does not only negatively affect availability of rice globally but also puts at risk food security of the peoples across wide swathes of the planet. The sensitivity to erratic behaviour of global food market has always been there but in a in an antagonised political atmosphere mired by the Russo-Ukraine conflict, it can act as an incendiary for a food bombshell. Had wheat and other agricultural produce from Russia and Ukraine enjoyed normal supply to the global market, food commodities in general would have been far less pricier now. Food-deficit and war-torn countries in Africa, in particular, will have a tough time to feed their peoples. The World Food Programme (WFP) responsible for reaching foods to the hungry peoples there set the alarm bell ringing much earlier.

Bangladesh does not quite face food crisis anywhere near the African order. But still it has to import some amount of rice in case there is an exigency on account of a shortfall. Even this year of bumper boro and aman harvests, the government set a target of importing 0.5 million tonnes of rice. The private sector also imports rice, mainly from India. Actually, Bangladesh's concern is more with the price levels rather than the availability of the staple. Although the food stock looks satisfactory, the poor have no purchasing power to access even to the lowest grades of rice. Both low-income and middle class people are at a great disadvantage if the staple registers prices higher than their affordability.

There are other considerations such as natural calamities like the floods that have wreaked or are wreaking havoc with crops, not just rice alone. Foods comprise items other than staple and at times a few of those can be its significant substitute or income source for procuring rice and wheat. Finally, the role of business cartels in pushing prices beyond all reasonable limits cannot be ignored. The way they have responded to India's imposition of duty on onion export is a clear evidence of their intrigues. Bangladesh also has the election year ahead. The incumbent government should decisively intervene in the market to preempt any uncanny manoeuvre in order to keep rice prices stable.