India has taken steps to drastically limit rice exports in a bid to cool prices and ensure sufficient food stocks for its more than one billion people. As Anjana Pasricha reports, India is battling inflation and a spike in food prices.
The Indian trade ministry has steeply raised the minimum prices at which all except the most expensive grades of rice can be exported.
The price of rice, a staple in many Asian diets, has nearly doubled in international markets during the past three months.
Farm analyst Devender Sharma, with the New Delhi-based Forum for Biotechnology and Food Security, says looming rice shortages in the world have prompted the government to virtually block exports.
He says the government wants to boost local supplies in order to stabilize rising prices in the domestic market.
"I think the message is very obvious, because if you look at the tightening of rice position globally, Vietnam has banned exports and Thailand has imposed restrictions," he said. "India knows very well if at this juncture it allows rice exports to go, there is a clamor for rice from many developing countries. So India has ensured that its own domestic supplies are maintained."
India is the world's second-largest producer of rice and a major rice exporter.
But in keeping with a worldwide trend, India too is coping with a steep hike in prices of staples such as wheat, rice and lentils. Inflation last week climbed to nearly six-point-seven percent - its highest level in the past year. Spiraling food prices are the main culprit.
That has prompted pledges from the government that it will do all it can to stem the rise. The government has already banned the export of cooking oil, and cut some food import taxes to contain prices.
Food prices are a politically sensitive issue in India, where poor rural and urban masses make up more than two-thirds of the country's one billion plus population. The government faces elections next year, and is concerned that runaway food prices could anger voters.
Other South Asian countries are also facing a problem. Neighboring Bangladesh faces a massive hike in prices of rice after a cyclone last August wiped out half its rice harvest.
Agencies like the Food and Agriculture Organization have warned that food prices will continue to climb steeply in the coming year.