India has implemented an immediate ban on the export of non-basmati white rice due to concerns over a potential production shortfall caused by delayed monsoon rains, according to a government notice on Thursday (RushHourDaily, July 20). This decision has significant implications for the global rice trade, as India is the largest exporter of rice, accounting for over 40% of world rice exports in 2022 (RushHourDaily, July 20). In fact, India’s rice shipments in 2022 reached a record-breaking 22.2 million tons, surpassing the combined shipments of the next four largest exporters – Thailand, Vietnam, Pakistan, and the United States (RushHourDaily, July 20).
India’s rice exports are not limited to a few countries; they reach more than 140 nations. Key buyers of Indian non-basmati rice include Benin, Bangladesh, Angola, Cameroon, Djibouti, Guinea, Ivory Coast, Kenya, and Nepal. On the other hand, Iran, Iraq, and Saudi Arabia primarily purchase premium basmati rice from India (RushHourDaily, July 20). In 2022, India exported a total of 17.86 million tons of non-basmati rice, including 10.3 million tons of non-basmati white rice. To further illustrate India’s significance in the rice trade, it is worth noting that in September 2022, India imposed a ban on broken rice exports and implemented a 20% duty on various grades of rice (RushHourDaily, July 20).
While the ban on non-basmati white rice exports is in effect, there are no restrictions on the export of basmati rice and parboiled rice, which amounted to 4.4 million tons and 7.4 million tons, respectively, in 2022 (RushHourDaily, July 20). Indian farmers cultivate paddy rice twice a year, with the summer-sown crop accounting for more than 80% of the total output, which reached 135.5 million tons in the 2022/23 crop year. In the winter months, paddy rice is mainly grown in central and southern states. Key rice-producing states in India include West Bengal, Uttar Pradesh, Andhra Pradesh, Punjab, Odisha, and Chattisgarh (RushHourDaily, July 20).
To encourage rice cultivation, India recently increased the price at which it purchases new-season common rice paddy from farmers by 7% to 2,183 rupees ($26.63) per 100 kg. However, industry officials are concerned that the area under paddy cultivation may decrease slightly in 2023 due to irregular distribution of monsoon rainfall (RushHourDaily, July 20). The delayed arrival of the monsoon resulted in a significant rain deficit until mid-June. Although heavy rains since the last week of June have alleviated the shortfall, they have also caused substantial damage to crops (RushHourDaily, July 20).
In conclusion, India’s decision to ban the export of non-basmati white rice has raised concerns about a potential production shortfall. As the largest exporter of rice globally, India plays a crucial role in the global rice trade. The ban does not apply to basmati rice and parboiled rice, which continue to be exported. However, the erratic distribution of monsoon rainfall may impact the area under paddy cultivation in 2023.
