Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that India, the world’s largest exporter of rice, is considering a ban on all non-Basmati rice — the vast majority of the country’s rice exports. The proposed ban comes as domestic prices rise and the government wants to avoid the risk of higher inflation.
Rice prices in Asia now at 2.5-year high due to El Nino. The Indian government’s move could send already high rice prices soaring further. India’s possible export ban is expected to lower domestic rice prices, but could lead to higher global prices. Rice importers have reacted by starting to aggressively build inventories. Shares of Indian rice mills edged lower on this news.
Rice is the staple food for about half the world’s population, with Asia consuming about 90 percent of the global supply. India accounts for about 40 percent of the global rice trade. India supplies rice to more than 100 countries. Benin, China, Senegal, Côte d’Ivoire, and Togo are India’s largest buyers. According to India’s Food Ministry, rice prices in Delhi have risen about 15 percent this year and the national average price of rice has risen about 8 percent. Vietnam expects rice exports to climb to their highest level in about a decade this year, with big increases to the Philippines, China and Indonesia.
Source: NetEase, July 14, 2023