India Considers Broadening Rice Export Curbs as Domestic Food Inflation Mounts

India’s rising food price inflation has sparked concerns that the government may further limit rice exports, and possibly ban most shipments of rice from the country. 

India is the world’s largest rice exporter, accounting for more than 40% of world shipments. Additional export curbs may send already elevated global prices of the food staple higher. 

It also could risk exacerbating food insecurity in countries highly dependent on rice imports. Top destinations for Indian rice include Bangladesh, China, Benin, and Nepal. Other African countries also import a large amount of Indian rice. India is one of the world’s lowest-cost providers of rice, although its export prices have risen in the past year, as seen in this Gro display. 

India already has rice export restrictions in place. The government last year banned broken rice exports and imposed a 20% duty on shipments of white and brown rice. (Other commodities affected by Indian export restrictions include wheat and wheat flour as well as sugar, as Gro wrote about here.) 

But Indian data released this week showed food price inflation remains a problem, and the government reportedly is considering broader export restrictions that could impact all non-basmati rice, or about 80% of India’s total rice exports. India previously enacted a ban on non-basmati rice exports in 2008. 

Countries typically enact export restrictions to maintain domestic supplies and control domestic prices. But such measures threaten to further tighten global supplies of many commodities. Among major rice exporting countries, the grain’s stocks-to-use ratio, a key measure of supply availability, is expected to drop in 2023/24 to the lowest level in five years. 

Such low inventories mean any additional reduction in shipments would likely fuel food price gains that continue to be driven by the Russia-Ukraine war as well as dry weather that is seen curtailing production of major crops worldwide.

Fears of crop damage due to the return of El Niño has also pushed up rice futures prices, which are currently at a two-year high. Rice is a water intensive crop and El Niño conditions tend to bring less rainfall to key rice production areas in Asia. 

In China, the world’s No. 1 producer of rice but also the biggest importer of grains worldwide, high temperatures and below-average rainfall in rice growing regions have depleted soil moisture to the lowest level in more than a decade, as shown in this display from Gro’s Climate Risk Navigator for Agriculture. 

Countries most affected by an Indian rice ban would be those already suffering from high domestic food price inflation, such as countries in Africa, along with Turkey, Syria, and Pakistan. 

For example, in Benin, Africa’s top importer of rice, domestic food prices are currently 40% higher than at the start of 2020, when global food inflation began to accelerate, according to Gro's Agricultural Price Inflation Application.