India rice export curbs to end decade of price stability

2023-02-28 14:06:46 By : Ms. Million Wu

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India’s recent curbs on rice exports could trigger a rally in global prices after more than a decade of stability, traders said, as New Delhi’s protectionist move coincides with falling output in other major producers and rising global demand.

Uneven monsoon rains hit rice planting in India, prompting the export restrictions in September, and floods have cut output in Pakistan even as consumption has grown in top importers such as Bangladesh and the Philippines. That’s why forecasters are saying global demand will outstrip production in 2022/23.

This is bad for Asian and African countries that use rice as a staple, some of which import as much as 60% of their supply.

Since India – the world’s biggest rice exporter – banned exports of broken rice and slapped a 20% export tax on some non-basmati varieties, global rice prices have jumped more than 10%. Last month, the Food and Agriculture Organisation’s global rice price index rose 2.2% to hit an 18-month high.

Global rice inventories could fall to their lowest in at least five years in 2023, three global traders said, citing internal assessments.

“Since India cornered 40% of the global trade, it’s not easy for others to replace falling Indian shipments when demand is rising from leading importers,” Gupta said.

This is a big change from last year, when India’s record 21.2 million tonnes of rice exports – 30% cheaper than rival suppliers – helped cap global prices while other food commodities soared due to supply disruptions.

After the September curb, India’s rice exports are set to fall by around a quarter this year.

Vietnam’s unmilled rice output is forecast to hold flat to last year’s 43 million tonnes, according to government data. Neighbouring Thailand is aiming to export 7.5 million tonnes this year, up about 7% from its previous target of 7 million tonnes.

Published in The Express Tribune, October 22nd, 2022.

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