What's New

Six months after India introduced a set of export restrictions on rice with the aim of holding down domestic prices, global rice markets continue to feel the impact.

In a significant move, the Indian government has lifted its export restrictions on non-basmati white rice, effective September 28, 2024. This comes after a three-month ban implemented in July 2023 due to concerns over domestic rice supplies. The new policy sets a minimum floor price of $490 per tonne for non-basmati white rice exports, signaling a cautious reopening of the global market for Indian rice.

Gradual Easing of Restrictions

Asia is home to 55% of the people in the world affected by hunger—more than 400 million—and faces continuing threats to food security. The crises of recent years—including the COVID-19 pandemic, the Russia-Ukraine war, and climate-related shocks—have disrupted Asia’s food supply chains as they have around the world. Currently, rising temperatures, unpredictable weather patterns, and floods pose threats to the production of rice and wheat, key staple crops in the region.

On July 20, India banned exports of non-basmati price (covered in our blog post of July 25)—aiming to cool rising domestic prices—a move many feared would drive rising global prices higher. Since then, that trend has continued: The benchmark Thai rice price has risen 14%, Viet Nam rice prices are up 22%, and India white rice prices are up 12% (Figure 1). In August, in an effort to prevent exporters from undermining the ban, India put a surcharge of 20% on exports of parboiled rice and instituted a minimum sales price for basmati rice.

Figure 1

India’s import demand for edible oils has been significant over the past decade, with imports averaging $11.6 billion annually. In 2021, prior to the Russia-Ukraine conflict, India imported a staggering $17.1 billion of edible oils (Figure 1), dominated by palm oil ($9.6 billion), soybean oil ($4.8 billion), and sunflower/safflower oils ($2.4 billion).