The statement comes as food price inflation is having a profound impact on the Indian economy .
The move is expected to ease some of the burden on India's poor, but it signals unpredictable developments in the global food market, as India is a top exporter of many important agricultural products such as rice, wheat, sugar, and onions in the world .
The program to provide free or discounted food to the poor in India has been in place since the Covid-19 pandemic in 2020. In the latest move, the Indian government said it would extend the program for another five years, a move described as ensuring “stoves can continue to burn” in the homes of about 800 million people in the country.
According to calculations, at current purchase prices, the program is expected to cost up to 2,000 billion Rupees (equivalent to about 25 billion USD) per year to the Indian budget.
India, the world's second-largest producer of wheat and rice, has restricted exports of both grains to curb soaring domestic food prices.
The government will be forced to keep the export restrictions in place for some more time as it needs to procure grain from farmers to implement the programme, said a Mumbai-based dealer with a global trading firm.
“Without export restrictions, domestic grain prices would rise above the government-set floor price and they would not be able to buy enough,” the person added.
India’s rice production is expected to decline in 2023 for the first time in eight years, raising the possibility that India will further tighten its rice exports as the country’s general election approaches.
According to the Food and Agriculture Organization of the United Nations (FAO), India's move to restrict rice exports in July 2023 caused global rice prices to reach a 15-year high. In May 2022, India also unexpectedly banned wheat exports after a heat wave reduced production of the crop.
Minh Hoa (t/h according to VTV, Vietnam Agriculture)
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