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India is expected to ban sugar exports due to a lack of rain, which would likely raise global benchmark prices and potentially contribute to further inflation in global food markets.
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Posted 8/23/2023, 2:07:14 PM
arabnews.com
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India is facing a rise in food prices due to uneven and scanty rain, prompting the government to take measures to boost supplies and ease inflationary pressures.
India has imposed a 20% duty on parboiled rice exports, which is expected to reduce shipments and increase global rice prices, following previous bans on non-basmati white rice and broken rice exports.
India, the world's biggest exporter of rice, has imposed more restrictions on rice exports in an effort to prevent smuggling and cool local food prices ahead of a general election, further squeezing global supplies of the staple grain.
The Indian government's efforts to control food prices, such as imposing taxes and export bans, may help contain inflation domestically but could lead to higher prices globally, particularly for rice, affecting countries that rely on food imports.
Erratic climate conditions in India, including a dry August, have led to a significant increase in food prices, with onions alone becoming 25% more expensive since June, causing concern about global food inflation as India is a major exporter of rice, sugar, and onions and is a key supplier to many Asian and African countries.
Global food commodity prices declined by 2.1 percent in August, driven by falling prices of essential food items, excluding rice and sugar, according to the latest report from the Food and Agriculture Organization of the UN (FAO). Dairy products, vegetable oils, meat, and cereals experienced decreases in price indices, while the sugar price index showed moderate growth. The report also highlighted a significant surge in rice prices due to disruptions in the rice trade following India's ban on exporting Indica white rice.
The famous Darjeeling tea industry in India is facing a decline in production and demand as buyers turn to cheaper alternatives from Nepal, leading to concerns about the future of the area and its workers. The industry is attributing the decline to factors such as a labor shortage, climate change, and the free trade agreement between India and Nepal. The tea industry is calling for a revision in the trade agreement and stricter enforcement of geographical indication tags to protect the authenticity of Darjeeling tea.
India will reduce the limit on wheat stocks held by traders and millers, but has no plans to abolish import duty on the grain due to sufficient local supplies.