India’s 20 July ban on non-basmati white rice exports comes whilst Indonesia plans to safeguard meals safety towards disruptions brought on by the El Nino climate sample and difficulties with provides from Vietnam, the present main provider.

Although Indonesia is self-sufficient in rice manufacturing, it procures rice via MoUs when there’s uncertainty in assembly its home demand. Currently, Indonesia has MoUs for the availability of white rice with Myanmar, Pakistan, Thailand, Cambodia and Vietnam.

“Indonesia is now dealing with difficulties as Vietnam, the present main provider to the nation, goals to chop its rice exports considerably amid a drought forecast as a result of El Nino results. To guarantee assembly home demand, Indonesia is taking a look at India in its place provider, and accordingly, the nation has proposed an MoU for procuring as much as 1 mt of white rice yearly from India which is topic to availability.” one of the officials said.

Although white rice export from India is currently under the prohibited category, exports permission can be granted by the government to meet the food security needs of other countries at the request of their governments. India earlier approved exports of limited quantities of rice to Bhutan, Mauritius, UAE, and Singapore. The UN’s World Food Programme also requested India to supply 200,000 tonnes after the ban.

“The proposed MoU doesn’t impose any kind of binding commitment on India to supply rice if domestic production is not favourable. The purchase is subject to production in both countries. Also, the proposed MoU clearly lays down that it does not create any obligation on either party under international law. It also includes termination of the MoU at any time by either party with a 6-month notice period,” the official defined.

According to the commerce ministry, Indian exports of white rice to Indonesia in 2022-23 (April-March) was value $1.05 million and $6.51 million until June within the present monetary yr. India’s share in Indonesia’s white rice import was 9.61% in 2020, 17.51% in 2021, and seven.06% in 2022.

Therefore, “the MoU might push India’s rice export to Indonesia when export situations are beneficial. It may also assist enhance India’s exports to Indonesia, diversify the commerce basket and cut back the vast commerce deficit,” the other official said.

“Further, the MoU will work in favour of India to get a foothold in the Indonesian market and emerge as an alternate supplier to Indonesia in place of Vietnam, Thailand and Pakistan, leading exporters after India. This will also help India to enhance its reliability among other Asean (Association of Southeast Asian Nations) rice buyers such as the Philippines and Malaysia,” the official mentioned.

Indonesia is India’s largest buying and selling accomplice within the Asean area, with commerce standing at $38.84 billion and accounting for a little bit over 29% in 2022-23 of India’s commerce with Asean. With massive palm oil imports from Indonesia, the commerce deficit within the final monetary yr was $18.8 billion, in response to commerce ministry knowledge. “The matter continues to be in an early stage, and can be taken to the authorities involved earlier than searching for approval from the cupboard committee,” the first official said.

Queries sent to the spokespeople of the Indonesian embassy in New Delhi, commerce and food & public distribution ministries on Friday remained unanswered at press time.

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Updated: 15 Oct 2023, 10:11 PM IST