On 13th July, the Indian government announced a non-basmati rice export ban due to rising domestic prices and concerns about production shortfall due to late seasonal monsoon rains that damaged crops and disrupted transportation. The non-basmati rice ban took effect on 20th July.
India is the biggest rice exporter after Vietnam and Thailand, accounting for 41% of world rice exports, reaching 22.5 million mt in the 2022/23 season. According to market sources, the grade that is impacted is non-basmati white and broken rice, which accounts for approximately half of the last season’s exports (10 million mt). The rice grade ‘parboiled rice’ (7.5-8 million mt) is not included in the ban.
Last September, India imposed a 20% duty on exports of unmilled white rice, husked brown rice, semi-milled rice and wholly-milled rice.
Market sources told Mintec that a ban on Indian rice could create global food inflation concerns and particularly hit African countries. Yet, there could be a few exemptions by the Indian government for certain countries that are in need. This is largely because global rice stock is expected to decline to a six-year low to 170 million mt in 2023/24, which will likely result in even lower figures due to the upcoming El Nino weather event. Therefore, a tight rice market could spur global food inflation as this will also have a knock-on effect on the wheat market, in which stocks are also looking quite tight.