Explainer: Why India holds the key to global rice market outlook

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MUMBAI/NEW DELHI — India's surprise decision to ban wheat exports has raised concerns about potential curbs on rice exports as well, prompting rice traders to step up purchases and place atypical orders for longer-dated deliveries.

Government and trade officials have said India, the world's biggest exporter of rice, does not plan to curb shipments for now, as local prices remain low and state warehouses hold ample supplies.

Patchy monsoon rains, however, would stunt the crop and cut yields and that might lead to a drawdown in state inventories that would trigger export curbs to ensure sufficient supplies for the country's 1.4 billion people.India's rice exports touched a record 21.5 million tonnes in 2021, more than the combined shipments of the world's next four biggest exporters of the grain: Thailand, Vietnam, Pakistan and the United States.

India exports rice to more than 150 countries, and any reduction in its shipments would fuel food inflation. The grain is a staple for more than 3 billion people, and when India banned exports in 2007, global prices shot to new peaks.Any move to restrict exports from India would hit almost every rice importing country. It would also allow rival suppliers Thailand and Vietnam to raise prices that are already more than 30 per cent above Indian shipments.

 

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