Women sow seed in a rice field in the northeastern Indian state of Assam, July 5, 2023.
Xinhua News Agency | Xinhua News Agency | beautiful pictures
India is banned non-basmati white rice exports effective as of late Thursday, the government’s latest effort to curb high food prices.
The Department of Consumer Affairs said the ban would help ensure “full availability” of non-basmati white rice in India, as well as “calming the upside momentum in the domestic market.”
India belongs to the world leading rice exporteraccounts for more than 40% of the global rice trade, as well as second largest producer after China.
Analysts told CNBC that this week’s ban could send already rising capital prices even higher, compounded by the impact of the country’s September crisis. Prohibition of transporting broken rice.
“Global Rice [supplies] will tighten strongly… as the country is the world’s second-largest food producer,” said Eve Barre, ASEAN economist at trade credit insurer Coface.
Barre said Bangladesh and Nepal would be hardest hit by the ban, as both countries are top export destinations.
In addition to the reduction in the global rice supply, the panic and speculative reaction in the global rice market will exacerbate the price increase.
New Year’s Eve
ASEAN economist at Coface
Agricultural analytics firm Gro Intelligence predicts the ban could also exacerbate food insecurity for countries that rely heavily on rice. in a recent report announced prior to notification.
“Top destinations for Indian rice include Bangladesh, China, Benin and Nepal. Other African countries also import large amounts of Indian rice,” wrote Gro Intelligence analysts.
According to the Ministry of Consumer Affairs, non-basmati white rice constitutes about 25% of India’s rice exports.
DBS senior economist Radhika Rao said affected importers may turn to alternative suppliers in the region, such as Thailand and Vietnam.
Rice prices soar?
“In addition to the reduction in global rice supply, the panic and speculative reaction in the global rice market will exacerbate price increases,” Coface’s Barre said.
The prices are has hovered at a decade highThis is partly due to a tighter supply as the staple becomes an attractive alternative due to soaring prices of other major grains following Russia’s invasion of Ukraine in February 2022.
Wheat prices spiked this week after Russia withdraws troops from the Black Sea grain deal. The agreement sought to avert a global food crisis by allowing Ukraine to resume exports.
Roadside rice sellers in Mumbai, India, on Saturday, January 7, 2023.
Bloomberg | beautiful pictures
“Rice inflation accelerated from an average of 6% year-on-year to nearly 12% in June 2023,” DBS’ Rao said.
future raw rice rose 1% higher to $15.8/kg (ctw) after India’s announcement.
The South Asian country is grappling with high prices of vegetables, fruits and grains. The price of tomatoes in India has been more than 300% increase in recent weeks due to adverse weather. A Reuters poll predicts the country’s likely inflation reached 4.58% every year due to high food prices.
Rabobank senior analyst Oscar Tjakra predicts a further increase in global rice prices due to India’s share of the global market. Tjakra predicts prices may even surpass the peak in the second quarter when raw rice reaches $18/cwt.
