WASHINGTON - India’s move to restrict exports of certain types of rice could exacerbate food price inflation and should be reversed, International Monetary Fund chief economist Pierre-Olivier Gourinchas said on Tuesday.
Mr Gourinchas told a news conference that India’s restriction would have a similar effect to the suspension of the Ukraine Black Sea grain export deal, helping to drive up prices in other countries. He added that global grain prices could rise 10 per cent to 15 per cent this year.
“In the current environment, these types of restrictions are likely to exacerbate volatility on food prices in the rest of the world, and they can also lead to retaliatory measures,” Mr Gourinchas said. “We would encourage the removal of these type of export restrictions because they can be harmful globally.”
India is the world’s biggest rice exporter.
Last Friday, it announced a ban on shipments of non-basmati white rice to maintain domestic prices at comfortable levels ahead of the general election due in early 2024.
The government halted overseas sales of the grain with immediate effect.
The authorities said shipments would be allowed on the basis of permission granted by the Indian government to other countries to meet their food security needs and based on requests of their governments.
The move by India sparked panic buying in various countries, with videos on social media showing bags of the staple food flying off the shelves and long lines outside grocery shops.
From the US to Canada and Australia, reports of overseas Indians stocking up have gone viral. Some shops have imposed buying limits, while others hiked prices to cash in on the frenzy.
Rice is vital to the diets of billions in Asia and Africa, and India accounts for about 40 per cent of the global rice trade.
The South Asian country is grappling with high prices of grains, fruits and vegetables.
Retail rice prices in Delhi have climbed about 15 per cent in 2023, while the average nationwide price has gained more than 8 per cent, according to data from the food ministry. REUTERS, BLOOMBERG
