Rice export ban:Why India is so crucial to global rice trade
2023-07-20 21:33:11

India accounts for more than 40% of global rice exports

The Indian government Thursday prohibited the export of non-basmati white rice with immediate effect this was seemingly in response to both a rise in domestic prices and decreased sowing in several key rice-producing states because of erratic monsoon. According to food ministry data, the retail price of the grain climbed about 15%  in Delhi this year while the average nationwide price gained more than 8%.

Shipments will be allowed on the basis of permission granted by the government to other countries to meet their food security needs and based on request of their governments, the notification said. 

The latest Indian government move, which has already imposed restrictions on wheat and sugar exports, would affect a large portion of global rice trade. Rice is a staple food for about half of the world’s population, with Asia consuming about 90% of global supply. 


Why India is crucial to the global rice trade

India accounts for more than 40% of global rice exports, which amounted to 55.4 million metric tons in 2022. India's rice shipments in 2022 were more than the combined shipments of the Thailand, Vietnam, Pakistan and the US, the next four big exporters of the grain.

Over 140 countries are net importers of India non-basmati rice. Benin, Bangladesh, Angola, Cameroon, Djibouti, Guinea, Ivory Coast, Kenya and Nepal, having rice a staple food, are key buyers of non-basmati Indian rice.

India exported 17.86 million tons of non-basmati rice in 2022. In September 2022, Indian government banned the exports of broken rice and imposed a 20% duty on exports of various grades of rice as the country was itself grappling with high prices of food grains. 

The Indian government has not put any restrictions on the export of basmati rice which stood at 4.4 million tons in 2022. Iran, Iraq and Saudi Arabia mainly buy premium basmati rice from India.

Indian farmers plant paddy rice twice in a year. Summer-sown crop planting starting in June accounts for more than 80% of the total output, which was 135.5 million tons in the 2022/23 crop year. In winter months, paddy rice is mainly cultivated in central and southern states.

Monsoon: The late arrival of the monsoon led to a large rain deficit up to mid-June. And while heavy rains since the last week of June have erased the shortfall, they have caused significant damage to crops. The area under paddy could drop marginally in 2023 because of erratic monsoon rainfall distribution.