Thursday, September 21, 2023

India’s ban has pushed global rice prices to a 15-year high

Rice prices up 9.8 percent over last month, AFO

Global rice prices have hit a 15-year high after India imposed a ban on overseas sales of the grain.

Food and Agriculture Organization of the World (FAO) in its monthly report said that global food prices decreased in August, but rice prices increased by 9.8 percent compared to the previous month due to India. Reflects trade barriers following the ban on white rice exports.

Uncertainty about the duration of the ban and concerns about export restrictions have forced supply chain members to hold stocks, renegotiate contracts or stop offering prices, the UN agency said. As a result, most trades were limited to small volumes and early closing sales.

Rice has become more expensive in international markets in the wake of the coronavirus, the war in Ukraine and the impact of the El Nino weather phenomenon on production levels.

India in July announced a ban on exports of non-basmati white rice, which accounts for about a quarter of its total exports.

India accounts for more than 40 percent of the total global rice shipments.

Data analysis firm Guru Intelligence warned that the ban would hit African countries, Turkey, Syria and Pakistan, which are already struggling with inflation.

The Philippines, one of the world’s largest rice importers, on Thursday signed a five-year agreement with Vietnam to buy rice.

According to FAO, global rice stocks are forecast to reach an all-time high of 198.1 million tonnes, with India and China holding about three-quarters of the volume compared to last season.

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The chaos in the rice market comes as a war between major grain-producing countries Russia and Ukraine has sparked global prices of the food grain, which peaked last year and are now gradually declining. are

Global food prices rose slightly in July after Russia pulled out of a UN-Turkey-brokered deal.

The FAO said on Friday it had lowered its forecast for world trade in cereals in 2023 and 2024 to 466 million tonnes, down 1.7 percent from the previous marketing season.

Wheat and corn trade is forecast to decline for a number of reasons, including reduced exports from Ukraine due to trade disruptions linked to the ongoing war, the report said.

FAO added that the world body has also lowered its forecast for global rice trade from the July figure, taking into account the export restrictions imposed by India.

FAO added that rice trade is expected to recover in 2024 if India’s restrictions are prolonged and El Niño disrupts production in other Asian exporters.

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