India’s decision to curb rice exports is expected to lift world prices of the staple and trigger a rally in rival wheat and corn markets.
Traders and analysts say rice prices in key exporters India, Thailand, Vietnam and Myanmar are set to rise, hitting food importers already suffering from higher costs due to adverse weather and the armed conflict between Russia and Ukraine.
On Thursday (8 Sep), India banned exports of broken rice and imposed a 20% duty on exports of various grades of rice, as the world’s biggest exporter of the grain tries to augment supplies and calm local prices after below-average monsoon rainfall curtailed planting.
Phin Ziebell, agribusiness economist at National Australia Bank, said there would be substantial stresses on food security across many countries, adding that “global fundamentals could see further upside across the grains complex”.
Chicago wheat prices rose on Friday, poised for a third straight weekly gain, as India’s move and talk about Russia’s restrictions on Ukrainian grain shipments underpinned the market.
India accounts for more than 40% of global rice shipments and competes with Thailand, Vietnam, Pakistan and Myanmar in the world market.
One Singapore-based trader said, “Myanmar prices should go up by US$50 a tonne while suppliers in Thailand and Vietnam will be quoting higher prices.”
Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, told Reuters that the decision will impact trade flows as India’s white rice prices of the variety are about $60-$70 per tonne cheaper than Thailand’s. (NNT)