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KT explainer: Why UAE imposed temporary ban on selling rice overseas

by Angel Tesorero
Sunday July 30, 2023

Falling rice prices land UAE traders in soup

The UAE Ministry of Economy has imposed a four-month temporary suspension on exporting and re-exporting rice beginning on Friday, July 28.

The step is aimed at ensuring sufficient rice supply in the local market, following India’s export ban on non-basmati rice due to production shortfall.

What will happen to companies wishing to export or re-export rice from the UAE? How is the UAE filling the gap in the local rice supply? Will the price of rice cost more as India imposed export ban?

Here’s an explainer on the issue of rice supply in the UAE and the global market.

Where does the UAE export rice?

The main destination of rice re-exports from the UAE are Oman, Benin in West Africa, Zimbabwe United States and Somalia. The UAE mainly imports rice primarily from India, Pakistan, Vietnam and Thailand.

Why did the UAE impose ban on selling rice overseas? What varieties are covered by the export suspension?

According to the Ministry of Economy, the temporary export suspension is aimed at ensuring the maintenance of sufficient supplies in the local market, following India’s ban on exporting non-basmati rice.

The ban, which will last for four months, covers all rice originating from India imported into the country after July 20, 2023. The banned rice varieties include husked rice (including brown rice), wholly or partially milled rice, polished and crushed rice. These rules apply to all rice products, including those in free zones.

The ban could be extended automatically unless a decision to cancel it is announced.

What will happen to companies involved in the rice trade?

Companies wishing to export or re-export rice — either from India or elsewhere — must submit a request to the Ministry of Economy to obtain a permit. The application must be supported by all documents that help verify the data related to the rice shipment, particularly its origin.

The permit is valid for 30 days from the date of its issuance and must be submitted to customs authorities, in order to complete procedures.

How to apply for rice export permit?

Traders may go directly to the headquarters of the Ministry of Economy or send requests electronically through a dedicated ministry website ([email protected]).

Will rice in the UAE cost more after India imposed export ban?

Retailers are projecting a 40 per cent increase in the price of rice in the local market. But they also believe the issue is temporary and will be resolved soon once the new suppliers enter the market.

India is a major source of rice import for the UAE but Vietnam, Thailand and Pakistan are expected to fill the supply gap of non-basmati rice.

“This (rice export ban) is only a temporary move as the prices will stabilise and the situation will normalise and supply will be back to normal,” said Kamal Vachani, group director and partner at Al Maya Group, earlier told Khaleej Times.

“The availability of rice would be better and prices would remain stable. The UAE always cares about consumers,” he added.

What is the impact of India’s export ban in global rice supply?

India accounts for more than 40 per cent of world rice exports, equivalent to 55.4 million metric tonnes in 2022. India exports rice to more than 140 countries, including the UAE, Benin, Bangladesh, Angola, Cameroon, Djibouti, Guinea, Ivory Coast, Kenya, Nepal and Saudi Arabia.

The ban was triggered by the late arrival of monsoon that led to a large rain deficit up to mid-June. And while heavy rains since the last week of June have erased the shortfall, they have caused significant damage to crops, particularly rice in India.