India may impose export tax on rice

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

Bloomberg , citing sources familiar with the matter, said the Indian government is considering imposing an export tax on parboiled rice, which is partially cooked while still in its husk. However, no official decision has been made yet.

Rice prices in Asia have hit a 15-year high after India last month banned exports of non-Basmati rice (a popular variety in South Asia) and Thailand faced the risk of a drop in production. The Indian government is seeking to cool domestic food prices ahead of early elections early next year.

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

India is currently struggling with inflation, with prices of many food grains, fruits and vegetables soaring. In addition to banning exports of some rice, it has also restricted sales of wheat and sugar. The South Asian country is considering scrapping a 40% import tax on wheat and selling tomatoes and cereals from state reserves to improve domestic supplies.

Rainfall in many of India’s key rice-growing states, including West Bengal, Uttar Pradesh, Jharkhand, Bihar, Chhattisgarh and Andhra Pradesh, is 15% below normal, raising concerns about rice supplies. Rice is India’s biggest crop during the monsoon season.

Rice is 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 proportion is as high as 70%.

Therefore, analysts warn that recent price increases will put more pressure on the budgets of people in Asia and Africa, in the context of the global food market being affected by severe weather and the Russia-Ukraine conflict.

Ha Thu (according to Bloomberg)

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