India rice ban: Some US shops impose buying limit amid price hike and panic buying

Meanwhile, Bloomberg reported that "some shops have imposed buying limits, while others hiked prices to cash in on the frenzy. Indian restaurants worry about a shortage".

On July 20, India banned the export of non-basmati white rice to boost domestic supply and keep retail prices under check during the upcoming festive season. The government amended the export policy from 'Free with export duty of 20%' to 'Prohibited' with immediate effect.

This type of rice constitutes about 25 percent of the total rice exported from the country. "There would be no change in export policy of par-boiled non-basmati rice and basmati rice, which forms the bulk of exports," the food ministry had said in a statement.

Following this, a surge in panic buying of rice was seen in departmental stores across the US. Several videos were shared on social media platforms claiming that Indians in the US had started hoarding bags of rice. While CNBC-TV18 could not vouch for the veracity of the said videos, we were able to independently confirm that the hoarding began in California, Chicago, New Jersey and even in parts of Canada.

Moreover, grocery stores run by Indians in the US reportedly started increasing the price of rice bags, taking advantage of the opportunity. Business Line quoted an NRI saying that a 9 kg bag of rice now costs $46.99 as compared to $15-16 before the export was banned. Frontline also reported that prices of rice in the US have risen by around 11 percent.

Amid this, the International Monetary Fund (IMD) said it would "encourage" India to remove restrictions on the export of a certain category of rice, which, it said, would have an impact on global inflation.

Now, global rice importers are likely to seek direct deals with governments in exporting countries as India's ban on shipments of a key variety is squeezing supplies and igniting concerns over food security. Buyers from Africa to Asia are likely to scramble for rice shipments as supplies tighten in the coming months.

The ban will cut the availability of the staple on world markets by about a fifth, traders and analysts said, and could lead to importers seeking more government-to-government deals to overcome shortages and tame spiralling prices.

(With inputs from agencies)