In a move that is set to reverberate across global rice markets, India has swiftly imposed a 20% duty on parboiled rice exports, causing concerns about further supply shortages and price spikes. The world's largest rice exporter has been gradually tightening its grip on rice exports, causing worries for countries reliant on Indian shipments. The new duty on parboiled rice exports comes in the wake of a ban on non-basmati white rice exports imposed last month.
The unexpected ban on non-basmati white rice exports prompted many buyers to turn to parboiled rice, leading to a surge in its demand and prices. The imposition of the new duty now threatens to escalate the cost of Indian parboiled rice, making alternatives from competitors like Thailand and Pakistan more attractive.
"With this duty, Indian parboiled rice would become as expensive as supplies from Thailand and Pakistan. There is hardly any option for buyers now," a Mumbai-based dealer associated with a global trade house highlighted.
In 2022, India exported approximately 7.4 mn tons of parboiled rice. However, these recent export curbs could substantially diminish this figure, putting additional strain on the global rice supply and potentially leading to a hike in prices.
The United Nations Food Agency's rice price index recently climbed to its highest point in over a decade due to surging demand after India's export restrictions were imposed. India's actions have significant repercussions, as it accounts for over 40% of the world's rice exports. The reduced availability of Indian rice coupled with low inventories among other exporters could contribute to rising food prices, a trend that has been exacerbated by geopolitical events and unpredictable weather patterns.
A dealer from a trading company based in New Delhi mentioned that India has currently enforced limitations on various types of non-basmati rice, which is commonly favored by less affluent consumers in Africa and Asia. This move has led to a decrease in global rice prices recently, following a surge of over 25% caused by India's previous restrictions. Nevertheless, the dealer anticipates that prices will increase once more in the near future.
India's recent decision to restrict exports of various food commodities underscores Prime Minister Narendra Modi's government's keenness to manage food inflation, particularly in the run-up to the impending general elections. This move follows a series of measures, including the extension of the ban on wheat exports and the capping of sugar exports due to lower cane yields.
The actions taken by India are indicative of the delicate balance between international trade, domestic food security, and political considerations. As global markets continue to react to India's export curbs, the impact on food prices and availability remains a topic of concern for both producers and consumers worldwide.
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