As supplies are being squeezed and worries about food security are being raised by India’s prohibition on imports of a crucial type, international rice importers are likely to look for direct agreements with governments in supplying nations.
After India decided last week to forbid the export of non-basmati white rice, buyers from Africa and Asia are likely to compete for rice shipments as supplies become scarce in the coming months.
According to traders and economists, the prohibition will reduce the staple’s availability on global markets by around a fifth and may prompt importers to look for more government-to-government agreements to address shortages and control skyrocketing costs.
India left the door open for such agreements when it announced its export embargo last week,saying that it would consider fulfilling the demands of nations in need of rice supplies. In addition to the direction of global demand, the fall in 2023 also reflects changes in the composition of that demand towards domestic services, lagging effects of the US dollar’s gain (which slows trade because goods are frequently invoiced in US dollars), and rising trade obstacles.
Last September, India banned exports of broken rice in a bid to cool domestic prices, but since then official data shows the country approved sales of around one million metric tons of broken rice to Indonesia, Senegal, Gambia, Mali and Ethiopia. Government-to-government sales are now exempt from the restriction, and the government can still do so.
As of right present, India has enough supplies to satisfy such needs, although Vietnam is about to begin harvesting its biggest crop. Approximately 41 million tonnes of non-basmati rice were in
the government's stockpiles in India as of July 1. Consequently, they were able to meet the needs of both domestic public distribution and government-level commerce.