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In light of the potential impact on global rice supplies, India plans to restrict exports.

In light of the potential impact on global rice supplies, India plans to restrict exports.

Knowledgeable sources say that India, the world’s largest rice exporter, will likely limit some exports because of a domestic supply scarcity, which could further disrupt international food markets. As local prices have risen, the government is contemplating export restrictions on broken rice, which accounts for almost 20% of India’s global shipments. According to the sources, negotiations are at an advanced stage, and a decision could be announced soon. Reports that the Indian government is contemplating new restrictions, such as a ban on the export of broken rice, to ensure domestic supplies have recently unsettled the Indian and global markets. Even though a formal government decision on a potential ban has not been made, the market, which constitutes 40% of the international rice trade, was skeptical of the idea.

What official statement has the government issued in response to the rumors?

The food and commerce ministries’ spokesperson declined to comment. The finance ministry did not respond immediately to a request for comment. Restricting exports from India, which accounts for forty percent of the global rice trade, will deal an additional blow to countries coping with a cost-of-living crisis and exacerbating hunger. It will have repercussions for the billions of people who rely on the staple food, as approximately ninety percent of the world’s rice is produced and consumed in Asia.

In contrast to wheat and corn, whose prices increased after Russia invaded Ukraine, rice prices have remained low due to ample stockpiles, preventing a more severe food crisis. In 2008, prices soared to more than USD 1,000 per ton, more than double the current level, as India and Vietnam banned exports, causing supply panic. This year, prices have increased due to increased export demand. China primarily uses grain for animal feed, and several African nations import grain for human consumption. The stocks of Indian rice producers and exporters declined in anticipation of the restrictions.

The world’s food markets were rocked a few months ago when India restricted wheat exports due to a heatwave. Despite being a major wheat consumer, India is not a significant wheat exporter. The actual concern was that New Delhi might halt rice shipments as well. Fortunately, rice prices in India reached a five-year low around that time due to an abundance of global supply and a weak rupee. Today, a great deal has changed. First, Indian rice crops have been afflicted by an unknown “stunting” disease caused by a virus first observed in China in 2001. Even worse, rainfall in three central rice-producing states in the north and east of the country has been scant or erratic.

Vendors who withdrew their offer to export broken rice predicted that the product “would be prohibited.” In contrast, another exporter predicted that “there will be something in the way of export restrictions,” and a third indicated that “exact details are unknown at this time.”

A Ministry of Consumer Affairs, Food, and Public Distribution spokesperson, Sadhvi Niranjan Jyoti, declined to comment on rice export. Not immediately did the finance ministry respond to a request for comment. “Both 5 percent and 100 percent broken rice are in high demand.” “Exporters in the southern city of Kakinada, Andhra Pradesh, predicted that India may impose export restrictions,” said a trader.

India has already imposed export restrictions on wheat and sugar, shocking the world market and indicating a rise in food protectionism where nations are stifling the flow of locally produced goods to the rest of the world. As a result, global prices for food staples reached all-time highs, although they have since decreased as the outlook for global crops has improved. The potential restrictions on rice come as plantation has reduced by 8% this season due to some areas’ insufficient rainfall. In the primary agricultural states of Uttar Pradesh and Bihar, monsoon precipitation has been about 40% below average. The nation has received 9% more precipitation than average during the period.

The government has no intentions to restrict rice exports at this time, and there are sufficient buffer stocks to meet domestic demand, as stated by an official source. During the 2021-22 fiscal year, the nation exported 21.2 million tonnes of rice, of which 3.94 million were basmati rice. According to official data, it exported non-basmati rice worth USD 6.11 billion during the same period.