After a poor growing season in June and July, India banned the export of non-basmati rice to trade partners including Canada last week.
The government of India published the notice last Thursday, explaining that a late seasonal start to monsoon rains harmed crops and prompted fears of a production shortfall in the country, Reuters reported.
The sweeping ban impacts all non-basmati rice, including short- and medium-grain rice such as Sona Masoori, Jeera Samba and Matta.
Across Canada, there are mixed views on the impact, with some grocery store owners from B.C. to Newfoundland telling CTVNews.ca they have lots of non-basmati rice in stock, and others having to limit the number of products per customer to prevent stockpiling.
Experts say the ban prompted some Canadians to start panic buying, which could increase the price of types of rice not impacted by the ban.
There are not widespread reports of rice flying off the shelves in Canada due to the ban, but in the U.S., the rice ban caused scenes of people climbing shelves to reach backstock products and fighting over rice.
Rice of India, a company that exports basmati rice across the world, says on its website that India has more than 10,000 varieties of rice, but basmati only equals about one per cent of India’s production.
PANIC BUYING IN CANADA
Manish Limbachiya, owner of Namaste Indian Supermarket in Mississauga, Ont., said he needed to restrict sales on some types of rice to prevent panic buying.
“I have to take care of my customers as well, so I just told everyone to take one bag for each family so I can cover all customers’ families,” he told CTVNews.ca in an interview last week.
Limbachiya says he has some rice in stock but “not too much,” due to the ban.
Currently, Limbachiya’s store has Soona Masoori rice and Idly rice, both of which are covered by the ban.
‘DO NOT PANIC’
One poor growing season should not cause panic among consumers, one economist said, but in a post-pandemic world, many turn to stockpiling when production shortfalls could happen.
“Before COVID it was not that prevalent. Right after COVID, we have seen many of these types of things,” Murshed Chowdhury, professor of economics at the University of New Brunswick, told CTVNews.ca in a phone interview.
Mindsets shifted during a shortage of some goods during the pandemic, Chowdhury said, such as when people stockpiled toilet paper, fearing they’d be unable to buy more when they ran out.
“(Canada) is hugely dependent on input… That’s why (some) people are panicked,” he said. “But there are other sources.”
Canada grows wild rice in the Prairies, Ontario and the Maritimes and exports some products to the U.S., Germany, China and Taiwan, Statistics Canada’s data shows.
India is one of the world’s largest exporters of non-basmati rice, supplying Canadians with just under $3 million worth of the product between January and May of this year alone, StatCan data suggests.
This is equal to about 6.3 per cent of total rice imported by Canada. Other key suppliers include the U.S., Taiwan and Thailand, which supply Canadians with more rice than India.
However, Chowdhury says, consumers don’t like switching their habits and brands, and could be stockpiling due to preferences for specific non-basmati rice from India.
“Looking at this scenario, right now there’s going to be panic buying, but I don’t expect it to last too long,” Chowdhury said.
Farmers in India plant rice twice a year, with the recent summer crop not yielding as much produce due to weather. A separate crop is harvested in the fall, Reuters reported.
Chowdhury said this second crop could be the key to relief from shortages.
“If the next season there is a good harvest in India, then they’re definitely going to lift this ban quickly,” he said.
BAN HAVING LITTLE IMPACT ON MARKETS
There is a fear among experts that if non-basmati rice is hard to find, the price of basmati may be driven.
But according to Sylvain Charlebois, a Dalhousie University professor and director of the school’s Agri-Food Analytics Lab, the markets show no impact of India’s rice ban so far.
“When you look at world markets, rice prices are actually down since last week, not up,” he told CTVNews.ca in an interview Monday. “Which means that I think that rice will figure out a way to get to different markets regardless of what’s happening in India.”
Charlebois compared the rice ban in India to the axing of the Black Sea grain deal by Russia, which he said had little impact on the markets.
“It appears as though the stockpiling happening at retail in different parts of the world, including Canada, is mainly driven by consumer fears,” he said.
Charlebois said retailers implementing per-person restrictions can help curb stockpiling, which is “the worst thing for everyone.”
“This situation right now at least seems more about drama than actual economics,” he said.