Rice is a crucial staple for millions of the global population. The world is bracing for its most significant shortage in 20 years. India’s export ban on rice has shaken global rice markets, threatening food security if developing nations cannot afford or access rice.
However, multiple outlets believe that the shortage may be ‘artificial.’
“The only shortage out there right now would really be India’s plain, white, long grain, poor quality rice that they ship to a lot of countries throughout Africa and Southeast Asia,” Peter Bachmann, Vice President of Policy and Government Affairs of USA Rice told CNBC. “And when they slap a ban in place, that impacted those developing countries the hardest and first.”
India banned exports of broken rice and imposed a 20% duty on exports of some rice varieties in September 2022. In July 2023, India prohibited exports of its plain, white, long-grain rice. India’s rice exports make up 40% of the market; any export bans quickly influence global prices.
According to the International Food Policy Research Institute, rice prices spiked 15% to 20%, hitting their highest in almost 12 years. ″[India is] trying to secure enough rice in their domestic markets so their prices will drop for consumers,” Bachmann said.
Despite facing the same rising input costs for energy and fertilizer, market prices for rice stayed relatively stable compared to other agricultural commodities. U.S. farmers face the same turbulent rice prices. Michael Klein, vice president of communications and domestic promotion at USA Rice, said to CNBC, “Our farmers, they’ll go up against any rice farmer but they can’t compete with the foreign government.”
He added, “When U.S. rice farms struggled to stay profitable as global rice prices mismatched with rising input costs, Congress passed $250 million in supplemental funding. These programs exist just to stop these farmers from falling through the cracks because that would be a huge disaster.”