India seen keeping rice export bans into 2024, holding up global prices
Lower prices and ample stockpiles have helped make India one of the top shippers globally over the past decade, recently accounting for almost 40% of the total. African nations like Benin and Senegal are among the top buyers.
But Prime Minister Narendra Modi, who will seek reelection next year, has repeatedly tightened restrictions on shipments in a bid to curb domestic price rises and shield Indian consumers.
“As long as domestic rice prices face upward pressure, the restrictions are likely to stay,” said Sonal Varma, chief economist for India and Asia ex-Japan at Nomura Holdings Inc. “Even after the elections, if domestic rice prices do not stabilize, these measures are likely to get extended.”
India has imposed export duties and minimum prices, while broken and non-basmati white rice varieties cannot be exported. Prices surged to a 15-year high in August in response, with buyers from the most vulnerable importing nations holding back purchases.
Some sought waivers. In October, rice was still 24% ahead of where it was a year ago, according to the UN’s Food and Agriculture Organization.
Modi’s government wants to ensure adequate supplies at home and to cool price increases, said B.V. Krishna Rao, president of the Rice Exporters Association, which represents the country’s shippers.
He said the government would likely keep the export restrictions in place until the vote next year.
The arrival of El Niño, which typically wilts crops across Asia, may further tighten the global rice market, at a time when world stockpiles are heading for a third straight annual drop. The government in Thailand has said paddy output in the No. 2 exporter is likely to fall 6% in 2023-24 because of dry weather.
