September 25, 2022
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India’s rice export curbs paralyse trade in Asia as prices rise

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MUMBAI: India’s restrictions on rice exports have paralysed buying and selling in Asia, with consumers scouring for different provides from Vietnam, Thailand and Myanmar the place vendor are holding off on offers as costs rise, business officers mentioned.
India, the world’s largest exporter of the grain, banned shipments of damaged rice and imposed a 20% responsibility on exports of assorted different varieties on Thursday because the nation tries to spice up provides and calm costs after below-average monsoon rainfall curtailed planting.
Rice is the newest in a string of commodities which have confronted export curbs this yr as governments struggled to lift provides and struggle inflation amid commerce disruptions triggered by the Ukraine struggle. Rice costs have jumped 5% in Asia since India’s announcement and are anticipated to rise additional this week holding consumers and sellers on the sidelines.
“Rice buying and selling is paralysed throughout Asia. Merchants do not wish to commit something in a rush,” mentioned Himanshu Agarwal, government director at Satyam Balajee, India’s largest rice exporter.
“India accounts for greater than 40% of worldwide shipments. So, no person is bound how a lot costs will rise within the coming months.”
Rice is a staple for greater than 3 billion individuals, and when India banned exports in 2007, world costs shot to report highs of round $1,000 per tonne.
India’s rice exports reached a report 21.5 million tonnes in 2021, greater than the mixed shipments of the world’s subsequent 4 largest exporters of the grain: Thailand, Vietnam, Pakistan and the US.
Rice loading has stopped at Indian ports and practically a million tonnes of grain are trapped there as consumers refuse to pay the federal government’s new 20% export levy on prime of the agreed contract value.
Although there are some consumers able to pay greater costs for brand spanking new contracts, shippers are at the moment finding out pending contracts, Nitin Gupta, vp for Olam India’s rice enterprise.
As Indian exporters stopped signing new contracts, consumers are attempting to safe provides from rival Thailand, Vietnam and Myanmar, which have raised the worth of 5% damaged white rice by round $20 per tonne previously 4 days, sellers mentioned.
However even these suppliers are reluctant to hurry for contracts as they’re anticipating costs to strengthen.
“We anticipate costs to rise additional over the approaching weeks,” a dealer based mostly in Ho Chi Minh Metropolis mentioned.
Vietnam’s 5% damaged rice was supplied at $410 per tonne on Monday, up from $390-$393 per tonne final week, merchants mentioned.
China, the Philippines, Bangladesh and African nations comparable to Senegal, Benin, Nigeria and Ghana are amongst main importers of frequent grade rice, whereas Iran, Iraq and Saudi Arabia import premium grade basmati rice.
Provide disruptions from the Covid-19 pandemic and extra lately the Russia-Ukraine struggle has jacked up the costs of grains however rice has largely bucked the pattern resulting from bumper crops and ample inventories at exporters over the previous two years.
Consumers now concern India’s transfer might enhance rice costs and make the staple costly like wheat and corn, mentioned a Mumbai-based seller with a worldwide buying and selling agency.

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