La Niña conditions are expected to prevail during India’s June to September monsoon season, potentially boosting the country’s rice production, but concerns that India’s elevated domestic rice prices will prompt officials to ban rice exports remains high. India currently has the cheapest free on board (FOB) export price.
To control rising domestic food prices, India, the second-largest producer of rice globally and the world’s top rice exporter, imposed wheat and sugar export caps last month.
The India Meteorological Department recently updated the forecast for 2022 southwest monsoon to 103 percent of the Long Period Average (LPA), from 99 percent of LPA predicted in April. If this happens, this will be the fourth consecutive year in which the southwest monsoon is “normal” or “above normal” for the country as a whole.
But because Indian rice tends to be cultivated across various regions, each responding differently to monsoonal variability, market participants will want to track Gro’s state and district-level data for rainfall and soil moisture as the season progresses. (For example, this display in the Gro Climate Risk Navigator app shows weather conditions, including precipitation, temperature, and forecasts, specifically for rice-growing areas in West Bengal, India’s largest rice-area state.)
Any significant shortfall in India’s rice production could worsen an already complicated global food security outlook, however. Unlike wheat and vegetable oil prices, which have surged on supply disruptions after Russia’s invasion of Ukraine, rice prices have been broadly stable because adequate global rice stocks-to-use ratios have helped contain rice price increases. Whereas wheat and soybean oil have risen 43% and 44%, respectively, since the start of the year, rice futures are only up 23%.
According to a recently increased USDA estimate, greater planted area and record yields will put India in a position to produce 130 million tonnes of summer and winter rice (combined) in 2022/23.
As India’s next rice growing season progresses, Gro users can use Gro’s extensive subnational data for India to better quantify the risk of an above-average monsoon and to gauge its impact on rice production and exports.