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India prohibited the export of non-basmati white rice on July 20 in an effort to curb growing domestic prices. This resulted by stories and videos of impulse purchases and empty rice shelves in Indian grocery stores in the United States and Canada, which drove up prices.
There are thousands of cultivated and consumed rice varieties, but only four are traded internationally. The majority of global rice trade consists of slender long grain Indica rice, while the remainder consists of fragrant or aromatic rice such as basmati, short-grained Japonica rice used for sushi and risottos, and glutinous or fluid-like rice used for desserts.
India is the leading exporter of rice, accounting for approximately 40 percent of the global trade in the cereal. Thailand, Vietnam, Pakistan, and the United States are also major exporters.
China, the Philippines, and Nigeria are significant consumers of rice. There are “swing buyers” such as Indonesia and Bangladesh that increase imports when domestic supply is insufficient. Africa’s rice consumption is considerable and growing. In nations such as Cuba and Panama, it is the primary energy source.
India exported 22 million tonnes of paddy to 140 countries last year. Six million tonnes of this was the relatively inexpensive Indica white rice. (The global rice commerce was estimated at 56 million tonnes.)
Around 70% of the world’s trade is made up of Indica white rice, but India has stopped exporting it. This is on top of the fact that the country stopped exporting broken rice last year and put a 20% tax on exports of rice that wasn’t basmati.
It’s not strange that the export ban in July has made people worry about skyrocketing rice prices around the world. Pierre-Olivier Gourinchas, the head economist at the IMF, thinks that the ban would raise prices and that world grain prices could go up by up to 15% this year.
Also, Shirley Mustafa, a rice market expert at the UN’s Food and Agriculture Organisation (FAO), told me that India’s export ban didn’t come at a good time.
For one thing, rice costs around the world have been steadily going up since early 2022. Since June of last year, they have gone up 14%.
Second, there aren’t enough goods because the new crop won’t be on the market for another three months. In South Asia, floods in Pakistan and uneven monsoon rains in India have made it hard to get goods. Because the price of fertilisers has gone up, it now costs more to grow rice.
Many countries’ import prices have gone up because their currencies have lost value, while high inflation has made it more expensive to borrow money.
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