MUMBAI/NEW DELHI, June 10 (Reuters) – India’s surprise decision to ban wheat exports has also raised concerns about possible restrictions on rice exports, prompting rice traders to step up buying and place atypical orders for longer-term deliveries.

Government and trade officials said India, the world’s biggest rice exporter, does not plan to cut shipments for now as local prices remain low and state warehouses hold ample supplies. . Read more

This is a relief for import-dependent countries already struggling with soaring food prices, but the bulk of India’s rice growing season is ahead and any change in harvest prospects could alter its position on basic grain exports.

Monsoon rains determine the size of India’s rice crop, and abundant rains this year would help it maintain its preeminent position in the global rice trade.

Scattered monsoon rains, however, would delay the harvest and reduce yields, which could lead to a reduction in state stocks that would trigger export restrictions to ensure sufficient supplies for the 1.4 billion people. from the country.

WHY IS INDIA SO CRITICAL TO THE GLOBAL RICE SUPPLY?

India’s rice exports hit a record 21.5 million tonnes in 2021, more than the combined shipments of the world’s next four largest grain exporters: Thailand, Vietnam, Pakistan and the United States .

India, the world’s largest consumer of rice after China, has a market share of more than 40% of world rice trade.

High domestic stocks and low local prices have enabled India to offer rice at very favorable prices over the past two years, helping poorer countries, including many in Asia and Africa, to cope to soaring wheat prices.

India exports rice to more than 150 countries and any reduction in shipments would fuel food inflation. Grain is a staple food for more than 3 billion people, and when India banned exports in 2007, world prices soared to new heights.

WHO WILL SUFFER THE MOST IF INDIA RESTRICTS RICE EXPORTS?

Any measure to restrict India’s exports would affect almost all rice-importing countries. It would also allow rival suppliers Thailand and Vietnam to raise prices which are already more than 30% higher than Indian shipments.

Besides serving Asian buyers like China, Nepal, Bangladesh and the Philippines, India supplies rice to countries like Togo, Benin, Senegal and Cameroon.

WHAT IS THE ROLE OF THE MONSOON IN INDIA?

India’s summer-sown rice accounts for more than 85 percent of the country’s annual production, which reached a record 129.66 million tonnes during the crop year to June 2022.

Millions of farmers start planting summer rice in June when the monsoon hits India. The monsoon, which provides about 70% of India’s annual rainfall, is crucial for water-thirsty rice.

Indian farmers depend on monsoon rains to water half of the country’s farmland that lacks irrigation. In 2022, India is expected to receive an average amount of rainfall. But since June 1, the start of the four-month monsoon season, the rains have been 41% below average.

Rains are expected to resume in mid-June and stimulate rice plantings. Three years of average to above-average rains and new modern farming practices have increased rice production.

SHOULD THE GOVERNMENT BE WORRIED ABOUT RICE SUPPLIES?

India currently has more than adequate stocks of rice and local prices are lower than the state set prices at which the government buys paddy rice from farmers.

Rice export prices are also trading near lows in more than five years.

Meanwhile, stocks of milled rice and paddy in government granaries of 57.82 million tonnes are more than four times the target of 13.54 million tonnes.

Unlike wheat, India did not experience an increase in rice exports after Russia invaded Ukraine in February, as the Black Sea region is not a major producer or consumer of rice.

Reporting by Rajendra Jadhav and Mayank Bhardwaj; Editing by Gavin Maguire and Tom Hogue

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