- Most rice exports banned after rising retail prices
- India accounts for 40% of world rice exports
- Rice export group compares impact to war in Ukraine
- Rice is a staple food for 3 billion people
NEW DELHI, July 20 (Portal) – India has banned the export of non-Basmati white rice with immediate effect, the world’s largest rice exporter said on Thursday. An export group said the move could have an impact comparable to Ukraine’s war on wheat supplies.
The government said it imposed the ban after retail rice prices rose 3% in a month as late monsoon rains damaged the crop. While a late monsoon caused major rain failures until mid-June, heavy rains have caused considerable damage since then.
India accounts for more than 40% of world rice exports, but low inventories mean any cut in supplies will push up food prices, boosted by last year’s Russian invasion of Ukraine and unsettled weather.
“In order to ensure sufficient availability of non-basmati white rice in the Indian market and to mitigate the price increase in the domestic market, the Indian government has changed the export policy,” the government said in a statement, which said retail prices rose in March 12 months by 11.5%.
The move shows Prime Minister Narendra Modi’s government’s sensitivity to food inflation ahead of general elections almost next year.
His government has extended a wheat export ban after restricting rice shipments in September 2022. Sugar exports were also limited this year as sugar cane yields fell.
“India would disrupt the global rice market at a far greater rate than Ukraine would have done with the Russian wheat market invasion,” BV Krishna Rao, president of the Rice Exporters Association, told Portal.
Rice is a staple food for more than 3 billion people, and nearly 90% of the water-intensive crop is grown in Asia, where El Niño weather typically brings less rainfall. Global prices are already at their highest level in 11 years.
“The sudden export ban would be very painful for buyers as they cannot replace supplies from other countries,” Rao said.
While Thailand and Vietnam do not have enough inventories to make up the deficit, African buyers would be hit hardest by India’s decision, Rao said, adding that many countries will urge New Delhi to resume supplies.
WEATHER DAMAGE
Heavy rains in northern parts of India in recent weeks have damaged newly planted crops in states like Punjab and Haryana, and many farmers have had to carry out replanting.
Rice fields in the northern states have been under water for over a week, destroying newly planted seedlings and forcing farmers to wait for the water to recede so they can replant them.
In other major rice-growing states, including West Bengal, Bihar, Chhattisgarh, Andhra Pradesh and Telangana, farmers have set up rice nurseries but have been unable to transplant the seedlings due to insufficient rainfall.
Rice acreage was expected to increase after New Delhi raised the purchase price of rice, but industry officials now expect a slight decline. So far, farmers have planted paddy fields in an area 6% smaller than in 2022.
This week, prices for rice exported from Vietnam, the world’s third largest exporter after India and Thailand, rose to their highest level in more than a decade amid mounting El Niño supply concerns.
Vietnam’s 5% broken rice was offered for US$515-525 per tonne – the highest price since 2011. India’s 5% broken parboiled variety was near a five-year high at US$421-428 per tonne.
Buyers could head to Thailand and Vietnam, but their 5% share of broken rice could cost US$600 a tonne, a European trader said.
China and the Philippines, which generally buy Vietnamese and Thai rice, will be forced to pay significantly higher prices, another European trader said.
Additional reporting by Michael Hogan in Hamburg; Adaptation by Jan Harvey, David Evans and Conor Humphries
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