Why Are US Residents Hoarding Rice Following India's Non-Basmati White Rice Export Ban?

The Food and Consumer Affairs Ministry in India took on July 20 imposed a ban on the export of non-basmati white rice to address the volatility in retail prices within the country. The decision comes as rice production suffered from adverse weather conditions, including heavy monsoon rains in rice-producing states in the north and deficit rainfall in other regions. In an effort to ensure sufficient availability of non-basmati white rice in the Indian market and curb price surges, the export ban was put into immediate effect, impacting global rice supplies.

US Stores Witness Long Lines and Rationing Amidst Panic Buying

Following India's ban on non-basmati white rice export, panic-stricken Asian communities in the US, for whom rice is a staple, rushed to stores to stock up on their essential grain. Grocery stores, particularly those catering to the Indian diaspora, saw rice bags of all varieties flying off the shelves. The sudden demand surge led to store owners implementing rationing measures, restricting customers to one 20-pound bag (9.07 kg) of ordinary white rice per head. Major brands also faced a scramble for rice products, with prices witnessing a significant hike. As a result, US rice prices increased by around 11 per cent.

Indians residing in the US responded to the export ban by hoarding rice bags, fearing potential scarcity and further price increases. Grocery stores run by Indian communities also seized the opportunity to increase the price of rice bags, taking advantage of the high demand. A 9 kg bag of rice that used to cost $15-16 before the export ban is now being sold for as much as $46.99, causing discontent among customers. Videos of panic-buying rice, particularly sona masuri variety, have gone viral on social media, confirming the onset of hoarding in various states, including California, Chicago, New Jersey, and parts of Canada.

The ban on non-basmati white rice export from India is expected to inflate food prices worldwide, given India's significant presence as a major rice exporter, especially to African countries. Moreover, China, another major rice producer, has also experienced adverse weather conditions impacting its rice production. Combined with the ongoing war in Ukraine, which has already affected global food prices, the situation has raised concerns about rice scarcity. However, analysts remain optimistic that the worldwide rice shortage may ease by 2024.

India's Diaspora Markets and Rice Export Figures

In recent years, India has significantly contributed to the rice market, exporting 17.78 million tonnes of non-basmati rice in 2022-23, a slight increase from the previous year's 17.26 million tonnes. Two main diaspora markets for Indian rice include the Gulf countries, which imported 6.95 lakh tonnes, and Europe, with 73,000 tonnes imported last year.

Meanwhile, the North American market, comprising the United States and Canada, imported 64,330 tonnes of non-basmati rice from India during the same period. The ban on non-basmati white rice export is likely to impact these markets and prompt increased rice prices in the region.