Friday, September 30, 2022

Why India Holds the Key to the Global Rice Market Outlook

Why India Holds the Key to the Global Rice Market Outlook

India’s surprise decision to ban wheat exports has also raised concerns about possible restrictions on rice exports, prompting rice traders to increase purchases and place unusual orders for long-term deliveries.

Government and trade officials have said that India, the world’s largest exporter of rice, is not planning to curb shipments right now, as local prices are low and there are enough supplies in state warehouses.

This is a relief to import-dependent countries, which are already grappling with rising food costs, but much of India’s rice-growing season is ahead and any change in crop prospects will change its stance on exports of the staple grain. could.

Monsoon rains determine the size of India’s rice crop, and this year’s bountiful rains will help it retain its dominant position in the global rice trade.

However, light monsoon rains will affect the crop and cut yields and could lead to a fall in the state’s stock which will trigger export restrictions to ensure adequate supplies for the country’s 1.4 billion people.

Why is India so important to the global rice supply?

India’s rice exports touched 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 rice consumer after China, has a market share of over 40% in the global rice trade.

High domestic stocks and low local prices have allowed India to offer rice at steep discounts over the past two years, helping many in poor countries, Asia and Africa, to cope with rising wheat prices.

India exports rice to more than 150 countries, and any reduction in its shipments will lead to food inflation. Cereal is a staple for more than 3 billion people, and when India banned exports in 2007, global prices hit new highs.

Who will suffer the most if India restricts the export of rice?

Any move to restrict exports from India will affect almost every country that imports rice. This will allow rival suppliers Thailand and Vietnam to raise prices that already exceed 30% of Indian shipments.

Apart from serving Asian buyers such as China, Nepal, Bangladesh and the Philippines, India supplies rice to countries such as Togo, Benin, Senegal and Cameroon.

What is the role of monsoon in India?

India’s summer sown rice accounts for more than 85% of the country’s annual production, rising to a record 129.66 million tonnes in the crop year by June 2022.

Millions of farmers begin sowing summer rice in June, when the monsoon hits India. Monsoon, which gives about 70% of India’s annual rainfall, is important for water-thirsty rice.

Indian farmers depend on monsoon rains to water half of the country’s farmland, which lacks irrigation. In 2022, India is projected to have average rainfall. But since the four-month monsoon season began on June 1, the rainfall is 41 per cent less than the average.

Rains are expected by mid-June and will encourage sowing of rice. Three years’ average or above average rainfall, and new, modern agricultural practices have increased rice production.

Should the government worry about the supply of rice?

India currently has sufficient stock 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 their lowest level in more than five years.

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

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

This article is republished from – Voa News – Read the – original article.

Nation World News Desk
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