Rice importers warn of severe shortage

 
Rice importers have warned of a severe shortage in the GCC as more countries follow India and reduce exports of rice amid fears of an international crisis driven by soaring food prices.

Traders in the UAE have warned that current stocks of non-basmati rice could last for only two to six weeks as panic buying at stores and supermarkets has already resulted in prices shooting up by almost 100 per cent.

India last week imposed an export ban on all non-basmati rice in an attempt to regulate domestic prices.

Rice, the staple food for about three billion people, rose 2.4 per cent to $20.26 per 100 pounds (45.3 kilograms) in Chicago trading yesterday after doubling in the past year.

“A lot of what we’re seeing at the moment is not related to production, but the fact that a number of countries are implementing trade restrictions,” said Darren Cooper, a senior economist at the International Grains Council in London.

India is one of the largest exporters of rice and ships out around 300,000 tonnes of non-basmati rice and 100,000 tonnes of basmati each month.

According to the Food and Agricultural Organisation, 36 countries including China face food emergencies this year as grain stockpiles fall.

Most affected businesses in the emirates will be restaurants and importers.

“Almost 75 per cent of our agro business valued at about Dh3 million to Dh4m a month is rice. We import about 30 containers of Ponni and Palakaddan Matta every month. I am afraid it is going to stop,” said Binu Dasan of Jaleel Trading. The Indian ban increased the minimum price for export of non-basmati rice to $1,000 per tonne from $850, triggering a scramble among rice importers struggling to secure supplies and control soaring food prices.

Faisal Mohammed, General Manager of the UAE based Alia Mohammed Trading, the largest importers of rice told Emirates Business the short supply would severely hit the GCC market, as Saudi Arabia, the UAE and other gulf countries imported the majority of rice from India.

“The Indian ban has had a domino effect with Thailand, the largest producer and exporter of rice, announcing a similar decision,” said Mohammed.

Vietnam, the world’s second-largest rice exporter after Thailand, also announced last week it would cut exports by 22 per cent.