As competitors attempt to cover the 10 million metric tonne vacuum left by New Delhi, the world market is bracing for similar steps by rival suppliers to prevent potential domestic shortages. This is raising concerns about already high global food prices. Experts claim that India’s most recent limitations are nearly identical to those it imposed in 2007 and 2008, which led to a domino effect in which many other nations were compelled to limit exports to protect domestic consumers.
This time, the effects on supplies and pricing may be considerably more profound because India now accounts for more than 40% of the world’s rice trade, up from roughly 22% 15 years ago. As a result, pressure is mounting on other rice-exporting countries like Thailand and Vietnam to follow suit.
After India stunned buyers last month by imposing a restriction on the sale of commonly eaten non-basmati white rice in an effort to contain price increases, the impact on prices of the world’s most popular staple was quick, reaching 15-year highs. In 2022, New Delhi had already prohibited the supply of inferior broken rice. Thailand, Vietnam, and other exporting nations are prepared to boost up their efforts in an effort to close the gap caused by India’s deficit. The world’s second, third, and fourth largest exporters, Thailand, Vietnam, and Pakistan, have indicated that they are eager to increase sales because interest in their crops has increased as a result of India’s ban. The Philippines, China, Senegal, Nigeria, South Africa, Malaysia, Cote d’Ivoire, and Bangladesh are the top importers of non-basmati rice.
Since India’s ban, prices have increased globally by almost 20%. According to dealers at international trading companies, a further 15% rise could result in limitations from Thailand and Vietnam.
While some of India’s eastern regions lacked precipitation to begin planting, the unpredictability of the monsoon’s rainfall distribution caused flooding in certain rice-growing northern states.