The Indian government ordered restrictions on rice exports, which could further pressure its value on the international market.
The country, producer of 40% of the rice consumed by the world, had previously prohibited exports of all white rice -with the exception of the basmati variety and broken rice- and now it has ordered a 20% withholding tax on parboiled rice , which accounts for a third of all shipments from India.
Parboiled rice -also called steamed, precooked or parboiled- is the most common in supermarkets and results from a process where the rice with the husk is partially boiled before grinding it to increase its nutritional values and change the texture.
The measure, set “with immediate effect” by the Indian Ministry of Finance, will last until October 15 and could compromise the world supply of rice and, therefore, put pressure on its price.
In fact, rice prices from Asia jumped to a 15-year high since the beginning of this month, especially impacting importing countries like the Philippines and some African nations.
Pressured by food inflation, the Indian government is also considering abolishing a 40% tax on imported wheat, and selling tomatoes, onions and cereals from state reserves to improve local supplies, Bloomberg and Europa Press reported.
In political terms, Prime Minister Narendra Modi seeks, with these relief measures, to increase his chances for a third term, ahead of the elections in April and May next year.
Among analysts, the fear is that India’s decisions, although beneficial for its domestic market, could affect other countries, especially the poorest ones.
“With this decision, domestic prices will fall and it will help the government to control food inflation, but global prices will rise and buyers will have to absorb this increase,” said BV Krishna Rao, president of the Exporters Association. of rice.
Source: Ambito
