India, the world's largest rice exporter, from September 9 is imposing a 20% export duty on certain rice exports in a bid to curb soaring domestic prices while ensuring adequate local supplies. Parboiled and basmati rice are excluded from the new export duty.
Domestic prices for rice and rice products in India, which have been climbing since April, are now at a record high, as can be seen in this Gro Data Series chart. As India accounts for more than 40% of the world's rice shipments, its new export curbs could also lift rice prices globally.
Heading into this growing season India was already anticipating lower rice production because a slower than usual start to its monsoon season had curtailed rice planted area. Additionally, precipitation levels have been poor in India’s top two rice producing states. In West Bengal, India’s largest rice producing state, precipitation levels through September 6 were 13% lower than the 10-year average, and in India’s second-largest producing state, Uttar Pradesh, accumulated rainfall is 26.4% below its 10-year average.
Overall, however, an aggregation of India’s rice growing areas, using Gro’s Climate Risk Navigator for Agriculture, shows that accumulated rainfall between June 1 and September 6 was 1% below the 10-year average. View a display in Gro’s Climate Risk Navigator of India’s aggregated rice growing areas for daily updates of precipitation, temperature, vegetative health, and other growing conditions or to see displays for the top rice growing states of West Bengal, Uttar Pradesh, and Odisha, India’s third-largest rice producing state.
In 2021, India exported 21.3 million tonnes of rice, more than the combined shipments of Thailand, Vietnam, Pakistan, and the US, the world's next four biggest rice exporters. India exports rice to a wide range of countries including the top destinations of Bangladesh, China, Benin, and Nepal.
Earlier this year, China stepped up its rice imports amid rising feed grain prices spurred by the Russia-Ukraine war. China’s annual rice imports are forecasted to reach a record 6 million tonnes this year. Much of China’s imports are of broken rice, which is cheaper than whole grain rice.
Increased imports into China also come at a time when heat waves in China, the No. 1 rice producer, have driven soil moisture readings in China’s rice growing regions to the lowest level in at least a decade, as Gro wrote about here.
India’s new rice export duty was preceded by a series of export restrictions to help control domestic prices. In mid-May, the country banned wheat exports. A week later, it capped how much sugar could be exported. Then two weeks ago, it instituted a wheat flour export ban in an effort to stem rising food prices.