India’s restrictions on rice exports have paralysed trading in Asia, with buyers scouring for alternative supplies from Vietnam, Thailand and Myanmar where sellers are holding off on deals as prices rise, industry officials said.
India, the world’s biggest exporter of rice, banned shipments of broken rice and imposed a 20% duty on exports of various other types on Thursday as the country tries to boost supplies and calm prices after below-average monsoon rainfall curtailed planting.
Rice is the latest in a string of commodities that have faced export curbs this year as governments struggle to raise supplies and fight inflation amid trade disruptions triggered by the Ukraine war. Rice prices have jumped 5% in Asia since India’s announcement and are expected to rise further this week, keeping buyers and sellers on the side lines.
“Rice trading is paralysed across Asia. Traders don’t want to commit anything in a hurry,” said Himanshu Agarwal, executive director at Satyam Balajee, India’s biggest rice exporter.
“India accounts for more than 40% of global shipments. So, nobody is sure how much prices will rise in the coming months,” he added.
Rice is a staple for more than 3 billion people, and when India banned exports in 2007, global prices shot to record highs of around $1,000 per tonne.
India’s rice exports reached 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.
Rice loading has stopped at Indian ports and nearly one million tonnes of grain are trapped there as buyers refuse to pay the government’s new 20% export levy on top of the agreed contract price.
Published in The Express Tribune, September 13th, 2022.
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