Global Market Witnesses Surge In Rice Prices Except India's Parboiled Rice

The world market is witnessing a surge in the prices of all varieties of rice as they are trading above $600 per tonne barring India's parboiled 5% broken and Thailand 25% broken white rice after India on July 20 introduced a ban on export of non-basmati white rice in order to boost domestic supply and keep retail prices under check for the upcoming festival season.

It is worth mentioning that the rise in rice prices is now highest in nearly 15 years and global traders are now apprehensive that Thailand and Vietnam may resort to imposing restrictions on export of rice. Traders feel that India may also impose ban or introduce restrictions on parboiled rice exports, as per reports.

When India on July 20, 2023 imposed ban on exports of non-basmati white rice, it led to panic buying among foreign buyers as several videos surfaced on social media regarding the same.

It is important to note that there is sharp rise in the demand for Indian parboiled rice since the ban and reports suggest that Indian government is likely to intervene to curb exports.

Even after the ban, approximately 7 lakh tonnes of parboiled rice have already been exported between July 21 and August 17, a surge of nearly 25%.

And, the situation has only aggravated further following a dry spell in Southeast Asia due to El Nino effect raising fears of more export restrictions on rice.

The move by India to ban export of non-basmati is likely to impact the global rice market hard as India accounts for approximately 40% of global rice exports and is among the most competitively priced sources of Asian rice, according to reports. The ban on rice exports from India has come immediately after Russia's declaration of pulling out from the UN and Turkey-brokered Black Sea grain deal, according to report.

Amid soaring prices in the country, the government in India sought to amend the export policy from 'free with export duty of 20%' to 'prohibited' with immediate effect. Inadequate rainfall and consequent reduced sowing of rice and pulses pushed prices higher in anticipation of production shortfall, stated reports.

"Export policy of non-basmati white rice (semi-milled or wholly milled rice, whether or not polished or glazed)...is amended from free to prohibited," the directorate general of foreign trade (DGFT) said in a notification. Export policy of Non-Basmati White Rice amended to ensure adequate domestic availability at reasonable prices," the ministry said, adding, the move is aimed to ensure lower prices and adequate availability in the upcoming festival season, stated the PTI report.