Singapore, Indonesia, and the Philippines have appealed to India to resume rice exports due to disruptions caused by India's suspension of non-basmati shipments to control prices and the rising levels of global food insecurity triggered by the pandemic and Ukraine war.
Rice prices in Asia have surged to their highest level in almost 12 years due to India's rice export ban and adverse weather conditions, leading to concerns about food price volatility and potential shortages of other food commodities in the region. Factors such as extreme climate events, the onset of El Niño, trade restrictions, and protectionist food policies are contributing to the situation. While most Asian countries can withstand a supply shock in rice, there are concerns about the impact on overall farm output and consumer price inflation, particularly for vulnerable populations.
India's decision to impose a 40 percent export duty on onions may exacerbate food inflation in Gulf Cooperation Council (GCC) countries and disrupt supply chains, potentially leading to shortages and price fluctuations. However, the impact is expected to be temporary, and other onion-producing nations may respond to the higher prices by increasing their supplies. GCC countries may need to consider diversifying their sourcing of onions and bolstering domestic cultivation to mitigate future vulnerabilities.
Both rice and wheat supplies are facing alarming shortages, raising concerns about a potential world food crisis, and the Indian rice export ban, along with other factors, has implications for global rice markets and prices.
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.
India has seen an increase in its tariffs and trade policy measures in recent years, reversing the trend towards liberalization and increasing trade restrictions, which is a global phenomenon as many countries are adopting industrial policies to promote domestic production and exports; however, the effectiveness of these policies and their impact on economic growth and job creation remain to be seen.
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.
India has dropped retaliatory customs tariffs on American goods such as almonds, apples, walnuts, and lentils, just before U.S. President Joe Biden's visit to New Delhi for a bilateral meeting and the G-20 Summit.
The global food commodity prices declined in August, driven by falling prices of essential food items, excluding rice and sugar, according to the Food and Agriculture Organization of the UN (FAO). Various factors such as reduced demand, ample supply, and favorable harvest conditions contributed to the decrease in prices of vegetable oils, dairy products, meat, and cereals. However, the sugar price index experienced moderate growth, while the rice price index surged due to disruptions in the rice trade caused by India's ban on exporting Indica white rice.
India has imposed an anti-dumping duty on certain Chinese steel for five years due to concerns over potential dumping by Chinese sellers.
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.
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