India’s six-week rice ban has strained the global market
India's ban on rice exports has caused panic in the international market and led to a spike in prices in Asia, raising concerns about food security and potential scarcity.
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Posted 9/4/2023, 6:00:48 AM
wionews.com
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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.
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.
Rice prices are soaring globally due to factors like higher fertilizer costs, droughts, and India's ban on some rice shipments, which is putting vulnerable populations in poor countries at risk.
India is expected to ban the export of sugar for the upcoming season due to a lack of rain and reduced cane yields, which could increase prices and lead to further inflation on global food markets.
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.
The Philippines has implemented price controls on rice in order to protect consumers from inflated prices and curb inflation, with President Marcos setting maximum prices for regular and well-milled rice.
Surging rice prices in the Philippines, caused by India's export restrictions, serve as a warning for other major importers as they rush to secure supply and contain rising costs.
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.
Rising rice prices in Asia, caused by factors such as export restrictions and drought, are expected to have significant spillover effects and could pose challenges for central bankers trying to manage inflation.