No More Rice!
Global concerns escalate as India implements a rice export ban.
In 2022, India was responsible for over 40% of global rice exports, totalling 55.4 million metric tonnes. Within that year, India achieved a remarkable milestone by shipping a historic 22.2 million tonnes of rice, surpassing the combined exports of the world’s four largest rice exporters after India - namely Thailand, Vietnam, Pakistan, and the United States.
The most recent action taken by the Indian government, which has already placed limitations on the export of wheat and sugar, is anticipated to impact a considerable segment of the worldwide rice trade. Rice is a fundamental dietary staple for approximately half of the global population, with Asia alone accounting for roughly 90% of global rice consumption.
In 2022, India shipped about 17.86 million tonnes of non-basmati rice to international markets. However, in September of the same year, the Indian government decided to halt the export of broken rice and additionally enforced a 20% tariff on the export of different rice grades. This action was taken due to the domestic challenge of elevated food grain prices being experienced in the country.
India provided rice at significant discounts over the previous two years, aiding economically disadvantaged countries, a substantial portion of which are situated in Asia and Africa. This was feasible due to abundant domestic rice reserves and the prevalence of reduced local prices, thereby assisting these nations in managing the surge in wheat prices.
Imposing limitations on exports from India would impact nearly every nation that imports rice. Such a decision would also allow competing suppliers like Thailand and Vietnam to increase their prices, which are already more than 30% higher than those of Indian shipments. As expected, the export restriction imposed in July has triggered concerns about the potential escalation of worldwide rice prices. Pierre-Olivier Gourinchas, the Chief Economist of the International Monetary Fund (IMF), predicts that this ban could lead to price hikes, potentially causing a surge of up to 15% in global grain prices within this year.
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