IMF raises red flag on India’s ban on export of non-basmati rice, experts say country’s food security concerns primary

financialexpress.com:

India’s recent ban on export of non-basmati white rice has created quite a furore internationally. While on the one hand there are worries about the move likely to trigger a rise in global rice prices adversely impacting poor countries, there is also the need to ensure adequate supplies in the domestic market and keep prices in check. While the IMF has raised concerns about the move exacerbating volatility in food prices, experts say the picture on food inflation will be clear only after the monsoon plays out completely.

According to the International Monetary Fund’s chief economist Pierre-Olivier Gourinchas said, “In the current environment, these types of restrictions are likely to exacerbate volatility on food prices in the rest of the world. And they can also lead to retaliatory measures. So, they are certainly something that we would encourage the removal of these type of export restrictions, because they can be harmful globally.”

Addressing India’s inflation and food security concerns

However, there is another aspect to it. Dharmakirti Joshi, Chief Economist, Crisil highlighted that the ,“Two pressure points on consumer inflation are food and services. Risks to food inflation come from uneven monsoons and possibility of El Nino in the later half of season.” While he isn’t too concerned about vegetable inflation, which flares from time to time, he feels the “worry is on cereals and pulses which are already witnessing double digit inflation.”

He explained how the “Government has taken a number of steps from banning non basmati exports to market intervention to cool food inflation.” According to him, short-term up-tick is not a worry but “when prices increase on a sustained basis it becomes a matter of concern for