India's rice-export ban: Non-Basmati white rice shortages hit stores across the US; purchase restrictions, hoarding compound woes

After scanning the aisles at the local Patel Brothers, Apna Bazaar, Lotte Plaza and other South Asian grocery stores across US for Sona Massori, a staple rice relished by her mother in law and son, Aruna was relieved not to have returned home empty-handed but with a bag of rice. “I visited almost 10 plus stores. I started looking for a bag of Sona Massori at 9 am and it wasn't until 4 pm that I could finally lay my hands on a bag of rice at triple its usual price,” Aruna told ANI. Some like Aruna across the US managed to bring home rice bags while several others reported purchase restrictions and price gouging after top exporter, India, banned a large chunk of shipments, adding to stresses on global food markets that have already been roiled by bad weather and the worsening Russia-Ukraine conflict.

In a reminder of the baby formula shortage in the US post the Covid-19 pandemic and the Ukraine war, India's new ban on non-basmati white rice imports is being felt in mostly cities that are home to a sizeable Indian diaspora. India said the ban, enforced on Thursday evening, would “ensure adequate availability of non-basmati white rice in the Indian market” and lead to a lowering of prices for domestic consumers.

However, fallout of the rice ban is being felt in the big-box warehouses in the US as well. Sapna Foods in Maryland, which usually caters to more than a hundred plus retail stores and restaurants in the DC, Maryland and Virginia or DMV area, is now drawing bulk demand from neighbouring states such as New Jersey and others.

Tarun Sardana, the wholesale seller near Baltimore, told ANI in an interview Tuesday, July 25, that there was an immediate increase in the demand for rice once word of the ban spread on Thursday of last week. “We have been getting a lot of extra calls for specific rice — the Sona Massori. The demand on the weekend was even more. By Monday morning, everybody was just trying to source as much South Indian rice as possible from warehouses such as ours,” Sardana told ANI.

Sardana added that he stocks several different brands of rice in his warehouse, mostly from India, but the majority of what he sells is basmati rice, a premium-grade rice that is not included in the export ban. However, that hasn't stopped customers from trying to buy up every grain they can, of basmati and varieties included in the ban, just in case, he said.

At the storage centre as Sardana took stock of the pallets piled with rice bags that are ready to hit the retail shelves, the second-generation entrepreneur agreed that reports of panic-buying are flooding social media, setting off alarm bells. “I did see some videos on social media myself and speaking from my experience, there has never been such extreme chaos in our local stores,” Sardana told ANI.

Sardana did acknowledge that the current situation has unfortunately led to major rice companies adjusting their prices, resulting in price gouging. "Wholesalers like myself and rice companies are simply overwhelmed with the demand at this time. So, prices are unfortunately up and about 100 per cent, which is double at this time,” Sardara added.
India has taken this extraordinary step in order to ensure domestic supply, and bring down prices, which have soared due to excess rains and drought in rice-producing regions. According to government data, the domestic price of non-basmati rice has increased by almost 10 per cent this month.

In September, last year, a metric tonne of non-basmati rice in India cost about USD 330 US. People in India are paying 11.5 per cent more for rice than a year ago, according to the Union Ministry of Consumer Affairs, Food and Public Distribution. Veena Mehrotra, an Indian restauranter in the DMV (District of Columbia, Maryland, and Virginia) area said the supply of basmati may also be strained in the days ahead. The Washington metropolitan area is also sometimes referred to as the National Capital Region or colloquially as the DMV area.

“The government did not move to ban exports of basmati rice as it is a more premium product. Local concern is on the other staple varieties such as Sona Masoori, which is why the government used the dramatic step of halting exports. Bans are easy to explain to the public. We're not selling food abroad but are catering to the needs of consumers back home. This always works, especially before elections,” Veena said.

Reports suggest India's ban could raise fears of further increases in global food prices just days after wheat and corn prices soared following Russia's termination of a key grain deal. “This is just another example of India playing games with global food security, citing concerns over domestic supplies despite tens of millions of metric tons in government stocks in addition to what's stored privately,” said Bobby Hanks, a Louisiana rice miller and chair of the USA Rice International Trade Policy Committee, adding, “With this action, India can quickly build more stocks that they'll eventually dump back on the world market at dirt cheap prices and continue this cycle again.”

Kirk Satterfield, Mississippi rice farmer and chair of USA Rice, also weighed in on the development, saying, “Enough is enough, USA Rice is calling on the Biden Administration to see this political stunt for what it is and act to quickly initiate a case against India at the WTO through a formal request for consultations.”