Nothing wrong in government’s decision to ban rice exports, even when Russia ups its attacks on Ukrainian ports. Food is a strategic tool, as US has shown many times
With Russia stepping up attacks against Ukraine’s Izmail port across the Danube river, global food markets are in turmoil again. Russia has decided to junk the Black Sea grain deal – under which it gave safe passage for Ukrainian grain exports to the rest of the world via the Black Sea. But the price volatility was exacerbated by India’s decision to ban exports of several varieties of rice. Indian intervention in global grain markets – whether as a buyer or a seller – typically has outsized impact, given India’s status as a large producer and consumer of grains. As things stand today, India has a 40% share of world rice exports.
Switch-on-switch-off
Nor was this a first. Government of India (GOI) has frequently used trade as a switch-on-switch-off tap to manage prices of foodgrains within the country. Last year, in May, government banned export of wheat in a similar attempt to cool prices in light of the Russian invasion of Ukraine, which sent global wheat prices to all-time record high levels.
Switch-on-switch-off
Nor was this a first. Government of India (GOI) has frequently used trade as a switch-on-switch-off tap to manage prices of foodgrains within the country. Last year, in May, government banned export of wheat in a similar attempt to cool prices in light of the Russian invasion of Ukraine, which sent global wheat prices to all-time record high levels.