Dubai rice market defies Indian ban on exports

Sales of rice illegally exported from India are flourishing in Dubai's markets, even though some types are twice the price.

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DUBAI // Sales of rice illegally exported from India are flourishing in the markets of Dubai although popular varieties cost more than twice the price they fetched before New Delhi banned exports. The Indian government said yesterday its ban on exporting non-basmati rice was likely to remain in place for at least three months, but expatriate Indian traders in Dubai said it was easy to circumvent.

The ban was imposed last month to protect India's domestic supplies amid fears of a food crisis and mounting inflation. Businessmen in the UAE, however, are still selling popular Indian rice. Although it costs more than twice the normal price, Indian residents, especially South Indians, are snapping it up as they prepare for Onam, next month's annual harvest festival. South Indians say they are prepared to buy the smuggled rice for the Sept 12 festival despite the high prices. "The Onam festival is coming and it is colourless without Indian rice," said Anish Nambiar, a resident of Dubai. "An Onam without our favourite rice is not imaginable. Most people are buying and stocking up rice in preparation for the festival."

Experts warned last month that supplies of Indian non-basmati rice were drying up and would not last more than 10 days. Premium rice has vanished from supermarket shelves in the UAE. "We do not have the Indian non-basmati rice any more as it is mostly out of stock," said a spokesman for the LuLu supermarket group. "New stocks are not available as India has banned export of this commodity." Other supermarket chains have confirmed that Indian rice is unavailable and the rice on their shelves is mostly from Thailand, Vietnam and Egypt. But popular Indian varieties of non-basmati are available in shops in Deira, Bur Dubai and other areas; some is from old stocks and some is still coming from India, in defiance of the ban.

One trader said Indian businessmen were circumventing the ban. "Rice is exported on the pretext of rice powder or some other commodity," he said. "It is easy to do this." News of Indian rice for sale usually spreads in the community in Dubai by word of mouth. Premium rice is said to be available in 5kg, 20kg and 50kg bags at some shops. Traders said a 20kg bag of popular Thanjavoor Ponni rice could be bought for Dh145 (US$39.50), compared with Dh50 before the export ban, but the price was still rising fast.

Mota rice, another popular variety, is selling for Dh76, more than twice the price two months ago. Some Indians said shopkeepers were stockpiling Mota rice in anticipation of big sales before the Onam festival. "Shopkeepers tell us that they will not sell the rice now but will save it for Onam when they can charge much more," said Santosh Ravi, a Dubai resident. The UAE traditionally imports more than 750,000 tonnes of rice a year, mainly from India and Pakistan, but also from Thailand and Egypt.

The Indian ban has made importers look further afield in Asia for new supplies. However, it has caused panic buying and the price of Thai rice, which the UAE is now importing in increasing quantities, has risen 135 per cent. According to reports last month, UAE imports of Thai rice reached US$19.4 million (Dh72.3m) in the first three months of the year, compared with $8.3 million in the same period last year.