India is reportedly considering banning the exports of most rice varieties, following a surge in food inflation. As the world's largest rice exporter, this move by India could further elevate global prices for rice, especially with the return of the disruptive El Niño weather pattern.
The government, led by Narendra Modi, is discussing a plan to prohibit the exports of all non-Basmati rice, aiming to mitigate the risk of increased inflation before upcoming elections. While such a ban could reduce rice prices within India, it may have a negative impact on global prices.
Recent uneven rainfall distribution in key rice-growing regions has already caused grain prices to rise by up to 20% in the past ten days.
India accounts for over 40% of global rice exports, but low inventories make any reduction in shipments likely to augment food prices, which have already been affected by Russia's invasion of Ukraine and unpredictable weather conditions.
B.V. Krishna Rao, the president of the Rice Exporters Association, stated that India's prices rose due to the new minimum support price, leading other suppliers to follow suit.
Rice is a staple for more than 3 billion people, and Asia produces nearly 90% of this water-intensive crop, making it vulnerable to the typically reduced rainfall associated with the El Niño weather pattern.
In the previous year, India had already banned broken rice exports and imposed a 20% duty on white and brown rice shipments following Russia's invasion of Ukraine, which had caused soaring prices for wheat and corn. The country has also placed restrictions on wheat and sugar exports.
Rice prices in Asia have reached their highest level in over two years as importers stockpile in anticipation of El Niño's potential impact on plantations and crop damage.
