Stock-Basmati-Rice
At various times in the recent past, India had placed export restrictions on basmati and non-basmati rice. It has had a bearing on UAE retail prices given that India remains one of the key exporters of the commodity. Image Credit: Shutterstock

Dubai: India’s decision to allow exports of non-basmati rice once again will have an immediate beneficial impact on UAE retail prices of the food staple, according to market sources. It was mid-2023 that India placed restrictions on non-basmati shipments.

“Now that competitive pricing options on rice from India are again available, this is likely to influence pricing in the UAE,” said Dr. Dhananjay Datar, Managing Director at Dubai headquartered Al Adil Trading. “We even foresee prices drops of up to 20 per cent for the food commodity in the UAE once Indian shipments return in full force.”

Food commodity traders in the UAE were broadly in agreement about the likely price drop, especially by early to mid-November. “It will take a few weeks for the shipments from India to flow through in volumes that will have a bearing on local retail prices,” said one trader.

India has been one of the biggest exporters of rice in the world, and with a dominant share in the UAE market. 

Export but at a certain price level

Under the new directive, India has allowed non-basmati rice shipments provided these are done at a price limit of $490 per ton and over. They will also be exempt from export duties. India had imposed the ban on concerns about adequate supplies being available domestically.

“India's rice harvests in the last two years have been robust, contributing to the overall stability and availability of rice for both domestic and export markets,” said Datar, citing this as a major factor in ditching the ban now.

Plus, Indian food commodity traders were complaining about being cut off from key overseas markets through the ban period.

Dr Dhananjay Datar
"Given that India is the largest exporter of non-basmati rice to the UAE and the UAE being a major re-exporter, the export ban removal opens up exciting opportunities," says Dr. Dhananjay Datar of Al Adil Trading. Image Credit: Supplied

"Local prices of non-basmati rice had increased due to the export curbs, which is why the lifting of the ban should have a material impact on rebalancing what consumers will have to pay in the future," said Datar.

On basmati too, India had at one point placed tight export bans, and which was then revised but at a higher set price limit.

India still retains export restrictions on wheat, which it had imposed in 2022. There was also one on onions, but that was withdrawn in May this year.