Food retailers in Dubai have been forced to find alternatives to Indian non-basmati rice after the export ban is renewed.
Rice ban renewal forces hunt for alternatives
DUBAI // Food retailers in Dubai have been forced to find alternatives to Indian non-basmati rice following a decision to continue a ban on exporting the staple commodity. India's commerce secretary GK Pillai said his government would not lift an embargo on non-basmati rice, the staple grain's most affordable and popular variety. The government in New Delhi banned exports of non-basmati rice in April and imposed an export tax of US$165 (Dh606) per tonne on aromatic basmati. India banned wheat exports last year to safeguard domestic supplies for the world's second-largest population.
Mr Pillai said the government was also considering moves to tax imports of crude edible oils as an alternative to rice export controls. At least 85 per cent of food in the UAE is imported. India has a 53 per cent share of the global basmati rice market, but industry insiders said that countries such as those in the GCC, which once relied heavily on the Asian nation for their rice supplies, were turning to other sources such as Pakistan and Thailand to satisfy demand. The UAE imports more than 75,000 tonnes of rice annually from countries including India, Pakistan, Thailand, Vietnam and the Philippines.
Despite the ban remaining in place, retailers said that non-Basmati rice continued to be brought into the UAE and other Gulf countries. About 3.5 million Indians live in the GCC - 1.4 million of them in the UAE. "People are getting the rice in different ways, even if it means they bring it with them after they go to India to visit their families," said Khaled Zanul Abid, the manager of the Jebel Ali Free Zone Talal Supermarket.
David Berrick, the retail general manager of Abela Supermarket, said: "Prices have gone up and down somewhat, but I think that people are forced to accept the price of it, whatever the price is." Retailers said that customers had experienced some relief in the price of rice in the past few weeks. The price of the benchmark 100 per cent B grade white rice was down yesterday to $550 per tonne, having slipped with falling oil prices from its record high of $1,080 per tonne in April.
"The probability of them lifting the ban increased, seeing the surpluses that have come on the market, but also the surpluses have reduced the strain for them to do something," said Abah Ofon, a soft commodities analyst for Standard Chartered Bank. "Pressures have eased significantly, but there is still room for prices to go up higher." Riaz Hussein Bhojani, the general manager of Rashwell Company, a Dubai-based importer, said consumers and retailers alike were forced to find alternatives. "India is very near to here so smuggling is very common. And now India doesn't dominate the non-basmati rice industry anymore,"he said, adding that Thailand, Vietnam and Pakistan "have good crops and their currencies are weaker against the dollar, making their prices less".