The Importance of India to the Global Rice Trade

The Indian government announced that India is prohibiting the export of non-basmati white rice, effective immediately. This comes after a late start to the seasonal monsoon rains which hurt the crop and raise fears of a production shortfall.

India is one, if not the world’s biggest rice exporter, accounting for more than 40% of rice exports in 2022. Additionally, India recorded 22.2 million tons of shipments, more than the combined shipments of the world’s four biggest exporters of rice — Thailand, Vietnam, Pakistan, and the United States.

The prohibition of rice exports from India is perceived to affect global trade on a big scale. India exports rice to more than 140 countries, with Benin, Bangladesh, Angola, Cameroon, Djibouti, Guinea, Ivory Coast, Kenya, and Nepal as the key buyers of non-basmati rice. Iran, Iraq, and Saudi Arabia buy premium basmati rice from India.

In 2022, India exported 17.86 million tons of non-basmati rice, including 10.3 million tons of non-basmati white rice. Last September 2022, India banned exports of broken rice and imposed a 20% duty on exports of various grades of rice.

New Delhi has not put any restrictions on the export of basmati rice and parboiled rice.

West Bengal, Uttar Pradesh, Andhra Pradesh, Punjab, Odisha, and Chattisgarh are key rice-producing states in the country.

Farmers in India plant paddy rice twice a year. Summer-sown crop planting started in June, accounting for more than 80% of the total output. In winter months, paddy rice is mainly cultivated in the central and southern states of the country.

India also raised prices to boost the area of rice cultivation, with the government buying new-season common rice paddy from farmers at 2,183 rupees, a 7% increase from before.

The industry officials worry that the area under paddy could drop marginally in 2023 due to the erratic monsoon rainfall distribution. The late arrival of the monsoon led to a huge rain deficit up to mid-June. The heavy rains in the last week of June may have erased the shortfall however, they have caused significant damage to crops.