Indian Rice Export Ban Disrupts Food Prices in Asia and Africa

tendata blogTrade Trends News

ten data blog02-08-2023

· India, the world's largest rice exporter, banned the export of non-basmati white rice on July 20th.

· The Indian government is seeking to curb the rise in domestic food prices and "ensure adequate domestic supply at reasonable prices".

· In addition to Asia, many African and Middle Eastern countries are also vulnerable to export bans.


  >>>Click to Check More Import And Export Information from Tendata<<<


rice export,indian rice export,rice exports




India's rice export ban could ripple through the global rice market, with millions of people expected to be affected, with Asian and African consumers bearing the brunt.


India, the world's largest rice exporter, banned the export of non-basmati white rice on July 20 as the government sought to curb soaring domestic food prices and "ensure adequate domestic supply at reasonable prices".


India accounts for more than 40% of global rice trade.


Barclays said in a recent report that "based on our analysis, Malaysia appears to be the most vulnerable" and emphasized the country's heavy reliance on Indian rice.


The analysts wrote: "A large portion of its rice supply is imported, and India has a relatively large share of rice imports."


Singapore could also be affected, with the report showing that India accounts for about 30% of Singapore's rice imports.


However, Barclays noted that Singapore relies heavily on imports of general food products, not just rice. The country is currently seeking an exemption from the Indian ban.


With rice prices currently hovering at decade highs, El Niño poses a further risk to global production in other major Asian rice producers such as Thailand, Pakistan and Vietnam.


Barclays pointed out that given the highest weighting of rice in the Philippine Consumer Price Index (CPI) basket, the Philippines will become "the most vulnerable to global rice price increases". However, a large portion of the Southeast Asian country's rice imports come from Vietnam.


Also Read: Exploring the Future Prospects and Growth Sectors for India's Major Exports



Other affected regions

Asia is not the only region to be hit by India's rice export ban, with many African and Middle Eastern countries also vulnerable.


According to Fitch Solutions Research, BMI, the markets most affected by India's export restrictions are concentrated in sub-Saharan Africa and the Middle East and North Africa (MENA) region. The firm said Djibouti, Liberia, Qatar, Gambia and Kuwait were the "most exposed".


India has withdrawn non-basmati white rice, following a ban on broken rice shipments in September last year. According to BMI projections, this means that up to 40% of India's rice exports are now offline.

This is not the first time India has imposed an export ban on non-basmati rice, but this time the impact could be more far-reaching than before.


In October 2007, India imposed a ban on non-Brahmati rice exports, but the ban was then temporarily lifted and reimposed in April 2008, leading to a price increase of almost 30% to a record high of $22.43 per quintal.


According to agricultural research firm Center for International Potatoes (CIP), prices have tripled in six months.


Samarendu Mohanty, CIP's regional director for Asia, points out that India was not a major player in global non-basmati rice exports at the time, and that the current ban is "much more far-reaching" than it was 16 years ago.


The severity of the ban will depend on the reaction of other rice importers and exporters, he added.


Also Read: India Overtakes Us as Second Largest Agrochemical Exporter



Market 'may be in disarray'?

Mohanty said the world would face "possible chaos in the rice market" if major rice exporters such as Vietnam and Cambodia imposed their own forms of export restrictions, while key importers such as Indonesia and Malaysia scrambled to stockpile.


He warned that the situation could be even worse than what happened in 2007.


The number of people affected by India's rice ban will be in the millions," Mohanty said. He added that poor consumers in India's neighboring countries, especially Bangladesh and Nepal, would be hit the hardest.


Mohanty said, "The likelihood of lifting this export ban is very low." He added that the ban will remain in place at least until India's general elections next April.


The South Asian nation is currently grappling with high prices of vegetables, fruits and grains, a thorny issue that could hurt Prime Minister Narendra Modi's election prospects.


India's inflation rate rose to 4.8% in June as food prices soared, still within the central bank's inflation target of 2% to 6%.


However, HSBC estimated in a July 24 report that inflation "could reach 6.5% in July".


HSBC economists warned that extreme weather events could put further pressure on crop yields.


The bank noted, "If shipments fall, this could have an impact on global prices and spill over to wheat, which is a partial substitute." Economists said domestic and global grain prices have risen, with the latter also affected by the Black Sea grain deal.


Wheat prices rose sharply after Russia pulled out of the Black Sea grain deal.


Under the deal, Moscow agreed to allow Ukraine to continue exporting grain to prevent a global food crisis from erupting after the war in Ukraine.


But the Kremlin pulled out of the deal in July, claiming that promises made to Russia under the agreement had not been honored.



You may also want to know:

1. Global Import and Export News

2. Keeping up with Global Import Data

3. Real-Time Access to International Export Data

4. Learn How These Import Export News Can Help Your Import Export Business?

- Specific Trade Data to Help You Analyze Where to Go Next.

Leave Message for Demo Request or Questions

We always appreciate your visit at tendata.com. We'd love to hear your suggestions, feedback & queries. Please contact us to schedule a demo or learn more about our services. We will respond to your query within 1 working day.
  • Full company name please

  • 输入您的手机号

  • 输入您的邮箱

  • Fill in the code please

More Popular Blogs

These related articles may also be of interest to you

Geting Price

Global Trade Data Leader
Get Pricing
Demo
Free Demo
'Target Customer
'Acquisition & Intelligent
'Decision-Making
'Global Trade Marketing Intelligent
'Decision-Making SaaS Platform

Welcome Tendata · iTrader

Please fill in the infos to get free demo

  • *

    Enter your name please

  • *

    Full company name please

  • *

    输入您的邮箱

  • *

    输入您的手机号

  • *

    输入验证码

  • Read and agree to Service Agreement and Privacy Policy

中文