UAE: Rice prices may go up by 20% after India levies export duty

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Prices of Indian rice may increase by about 20 per cent in the UAE after the South Asian country levied export duty from September 9.

Out of four categories of rice exports, New Delhi imposed an export duty on white and broken non-basmati rice, while basmati rice and parboiled non-basmati rice have been exempted. This decision comes after the South Asian country is expected to record lower rice production due to a deficiency in monsoon rains in key states.

Retailers and importers said a majority – around 60 per cent – of people in the UAE consume these two variants of rice, and 20 per cent export duty will result in a similar percentage of increase in prices locally.

Dr Dhananjay Datar, chairman and managing director, Al Adil Trading, said these are major selling items and staple food for many nationalities in the UAE as these variants are consumed widely by Indians, Pakistani, Filipino and other nationalities.

“Crops in India have been low, which is why this step has been taken by the Government of India in order to keep local prices under control. White rice is one of the most consumed items and a staple food for many people across South and Southeast Asia. In addition, South Indians make their breakfast dosas and idlis from white rice. So that cost will also go up,” said Dr Datar.

India is a major source of rice for the UAE and other Gulf Cooperation Council (GCC) countries. India, which commands 40 per cent of the world’s total rice exports, exported more than 75 per cent of its 21 million tonnes to the UAE, Iran, and other GCC countries last year.

Quoting United Nations’ Comtrade data, Trading Economics said India's exports of rice to the UAE stood at Dh1.4 billion ($385.39 million) in 2020.

However, rice importers and traders said they can source these two variants that India levied export duty on from other countries, such as Pakistan and Vietnam.

“Since Pakistan has been badly affected by the floods, we believe Vietnam could be a good alternative market to source the rice,” said a trader.