MUMBAI: India has introduced a new rule that adds a 20% charge on the export of partially cooked rice, starting right away. This decision could further lower the amount of rice sent out from the world’s largest exporter, potentially raising worldwide rice prices even more. These prices are already trading close to the highest they’ve been in 12 years.
Just last month, India took buyers by surprise by stopping the export of the commonly consumed non-basmati white rice. This followed a similar ban on exporting broken rice last year. This move led some buyers to purchase more partially cooked rice, which then led to record-high prices for this type of rice. A dealer in Mumbai who works with international trade mentioned, “Due to this new charge, the cost of Indian partially cooked rice will be similar to rice from Thailand and Pakistan. Buyers don’t really have many options left.”
In the year 2022, India sent out around 7.4 million tons of partially cooked rice. The United Nations food agency’s index for rice prices climbed to its highest point in almost 12 years in July. This surge was caused by high demand after India put limits on rice exports. Key exporting countries saw their prices rise as a result.
India is responsible for over 40% of global rice exports. With other exporting countries having low supplies, any decrease in shipments from India could inflate food prices even more. Russia’s invasion of Ukraine last year and unpredictable weather patterns have exacerbated this situation.
India has imposed restrictions on all non-basmati rice varieties, commonly preferred by lower-income consumers in Africa and Asia. A dealer in New Delhi working with international trade mentioned this development.
“Global rice prices had started to go down slightly in the last few days, following a more than 25% increase due to India’s restrictions last month. However, it’s expected that prices will go up again,” said the dealer.
The government of Prime Minister Narendra Modi’s concern about upcoming elections is evident in recent food export restrictions.
Prime Minister Modi’s administration had already extended the ban on wheat exports after controlling rice exports in September 2022. They also set a limit on sugar exports this year due to lower sugarcane yields.