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After India’s move last month to stop exporting all non-parboiled, non-basmati rice, rice prices around the world have risen to a level not seen in almost 12 years.
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The All-Rice Price Index from the Food and Agriculture Organisation of the United Nations (with a base year value of 100 for 2014-2016) rose to 129.7 points in July 2023, which was 19.6% higher than it was a year earlier and the highest it had been since September 2011.
Even higher, at 24.4%, was the rise from one year to the next for the Indica Index, which reached 135.4 points in July. This index is made up of rice varieties that are grown in the subcontinent.
India stopped exporting all white rice that wasn’t basmati on July 20. That rice made up 9.94 million tonnes (mt) of the 22.35 mt of food that left the country from April to March 2022-23. At the moment, you can only ship basmati rice (4.56 mt in 2022-23) and parboiled rice that is not basmati (7.85 mt).
Rice is not as widely sold as wheat is around the world. Every year, the world trades 214–215 mt of wheat. Even when it was at its highest, 7.24 mt in 2021-22, India’s share was very small. India’s ban on wheat exports in May 2022 did have an effect on prices around the world, but it wasn’t a big deal.
According to the United States Department of Agriculture, rice trade in 2022-23 amounted to only 55.65 million metric tonnes. At 22.5 mt or 40.4%, India’s share is substantial, both quantitatively and in terms of price sentiment.
Thailand (8.5 mt), Vietnam (7.5 mt), and Pakistan (3.6 mt) were the other main rice exporting countries in 2022-23. None, individually or collectively, can occupy the over 9.9 mt void left by India.
India’s decision to partially ban rice exports came after inventories in government warehouses (including wheat) dropped to a five-year low on July 1st. Along with annual retail cereal inflation reaching 12.7% in June and concerns about El Nino affecting this year’s rice and wheat production, this has prompted the government to take action prior to the April-May 2024 elections.
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