India’s rice ban is affecting Canadians, but some may be panic-buying the wrong variety

India’s ban on the export of non-basmati white rice may be putting a strain on retailers and consumers, but wholesalers are warning against stocking up on the wrong kind of rice.

Sonali Shah, owner of Toronto-based Shah Trading, said there has been misinformation spreading around what kind of rice has been banned from exports.

“People are going to Costco and buying (large quantities of) basmati, but there’s no ban on basmati rice,” she said. “There’s some sort of misinformation there.”

Shah said while her company only imports basmati rice from India and depends on the United States for other long-grain varieties, she expects the cost of rice to go up across the board in Canada.

“This (shortage) will go on for a while,” she said, “And there is also an election coming in India next year.”

Her advice to consumers is to not panic-buy basmati, since that might lead to a further price increase.

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The impact of India’s rice ban, which took effect last month, has been felt acutely by wholesalers such as Sel Vaheesan owner of CeyCan Agro Ltd.  The weekend after India announced the ban, his phone was ringing off the hook.

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“My clients are small grocery stores. They have been calling me non-stop asking when we will have more rice,” Vaheesan, whose business is based in Toronto, said.

He said his stores are “almost out” of some varieties such as idli rice, Ponni rice and Seeraga Samba rice. Vaheesan says he has been advising his clients to opt for alternative rice varieties, such as those from Sri Lanka. But Sri Lanka, which is going through its own financial woes, may not be able to match the sheer volume of Indian rice.

Nearly half of Vaheesan’s rice stock comes from India. According to the Food and Agricultural Organization (FAO) of the United Nations, India accounts for more than 40 per cent of the world’s rice exports.

Matias Margulis, associate professor at the School of Public Policy and Global Affairs and the Faculty of Land and Food Systems at the University of British Columbia, said this rice export ban will have an impact on rice prices in Canada.

He said low-income Canadians will feel the impact, particularly those who come from cultural backgrounds where rice forms a significant part of their daily diet.

“Rice is sort of a unique commodity because it’s the major staple for such a large part of the global population,” he said. “There’s never huge amounts of extra stock supply anyway on the global market. So, when you get a shock like this, it sends prices up very quickly.”

Three days after Russia withdrew from the Black Sea grain deal last month, the Indian government announced that it will be stopping all exports of non-basmati white rice with immediate effect. In a statement, the country’s ministry of consumer affairs, food and public distribution cited the need to “ensure adequate availability of Non-Basmati White Rice in the Indian market and to allay the rise in prices in the domestic market.”

This decision comes as Indians have been struggling with high food prices. In September of last year, the government imposed a 20 per cent export duty on rice to lower the price in the domestic market. Despite this, the retail prices of rice have been rising in India. According to the government, the retail price has increased 11.5 per cent in the last year and 3.0 per cent over the last month.

“The prohibition on export of Non-Basmati White Rice will lead to lowering of prices for the consumers in the country,” the ministry said.

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According to a 2022 report, which Margulis co-authored, two-thirds of the world’s calories come from four staple foods: wheat, rice, maize and soybeans. At least 72 per cent of these crops are grown in just five countries: China, the United States, India, Brazil and Argentina.

The report said “global breadbasket failures” are going to be five times as likely by 2030 and 25 times more likely by 2050. This is linked to the increased intensity and frequency of extreme weather events.

“Rice and maize failures – events that are ‘extremely unlikely’ today in the global breadbasket regions – will occur at least every other year by 2050,” the report said.