Non-Basmati Rice Export Ban: What Does The Future Hold For Indian Rice Exporters?

Are you looking to export rice in bulk ? India has long held a dominant position in the global rice export market, with its non-basmati white rice playing a critical role in the country’s agricultural exports. Nonbasmati white rice exported from the country has grown in leaps and bounds during the last ten years due to rising demand from consuming countries, improved domestic production, and competitive pricing. This newsletter will particularly look deep into the present and future trends in the exportation of India's Non-Basmati White Rice. So, let's get started.

India’s Past Export Statistics:

Within eight years, from 2014 to 2022, India emerged as the largest rice-exporting country in the world, accounting for approximately 40% of global rice exports. In 2022 alone, non-basmati rice exports from India reached about 17 million metric tonnes, valued at nearly US$6 billion.

According to the USDA, this trend of growing rice exports continued until 2022; however, recent developments, particularly the government's ban on non-basmati white rice exports, have significantly altered the landscape.

The Export Ban of 2023: Rationale and Impact:

The Indian government had gone to the extent of radically banning exports of non-basmati white rice in July 2023, largely dictated by concerns over domestic food security and spiking inflation rates. It cited erratic monsoon patterns and their repercussions on rice production as the primary cause for imposing this ban. Besides, the food price was high due to inflationary pressures, which the government wanted to keep controlled inside the country by accommodating maximum domestic consumption.

Global Repercussions of the Ban:

Non-basmati white rice accounted for the lion's share of all rice exported by India, and the ban greatly disrupted world rice markets. India's total rice exports were 4.2 million MT down 21% from last year, while exports of non-basmati white rice fell by more than 93% after the ban, according to the USDA. This created shortages in world markets, and as a result of this, many importing countries, especially those from sub-Saharan Africa and Southeast Asia, witnessed sharp price increases.

The ban on exports by India affected the entire globe. Kenya and Madagascar, among other African countries reliant on large rice imports from India, experienced a sharp drop in supplies, resulting in food shortages and a general rise in prices in their local markets.

Meanwhile, countries like Pakistan, Myanmar, and Vietnam attempted to meet the shortfall; however, they could not fully compensate for the deficit. In addition, erratic weather patterns, worsened by the El Ni?o phenomenon, further strained global rice supplies, exacerbating the impact of India's export ban. According to IFPRI, such bans also create volatility in global markets, driving rice prices to unprecedented levels. Since rice is a staple food for billions of people worldwide, the ripple effects spread across the international food supply chain.

Impact on local Indian Exporters:

While the export ban helped keep domestic rice prices in check, the implications were rather adverse for local exporters. Many Indian exporters faced unsold stockpiles and unmet contractual obligations they could no longer fulfil. According to an article published by Business Standard, several Indian rice exporters noted that the ban could have a long-term impact on their businesses, as some of their international clients had shifted to alternative exporters during this period.

Additionally, Indian exporters faced increased scrutiny from importers who wanted more assurance that supply chains would remain stable over the long term. For many small and medium-sized exporters, the ban raised concerns about India's reliability as a consistent rice exporter in the global marketplace.

Indian Government May Ease Export Restrictions: Indications are that the Indian government is considering easing restrictions on non-basmati white rice exports.? The Indian government is keeping a close watch on domestic rice production and may allow limited exports if production starts to overshoot domestic demand. Projections from the Food Corporation of India suggest that rice production could improve in the next season due to better monsoon patterns and favourable weather conditions. Increased production is seen as a positive factor for both the domestic and global rice markets, enabling India to regain its position as a leading rice exporter.

India Might Reclaim Key Rice Export Markets by 2025:

Projections from USDA and IFPRI indicate that India's rice exports could capture a significant share of markets in sub-Saharan Africa and Southeast Asia by 2025, regions heavily reliant on Indian rice supplies. With rising production, India is expected to strengthen its presence in these global markets again.

As international demand for non-basmati white rice remains strong, and alternative exporters struggle to meet global needs, India is expected to see a rebound in export volumes. With favourable production and supportive government policies, exports could exceed 20 million MT by 2025.

Conclusion

The future of India’s non-basmati white rice exports remains intertwined with domestic production levels, government policies, and global market dynamics. While the export ban? of 2023 caused significant disruptions, there are positive signs that India could once again play a dominant role in the global rice market. For exporters who are eagerly waiting to export rice in bulk, staying attuned to these developments is critical in navigating the future of non-basmati rice exports.

Register as an Exporter: https://www.tradologie.com/lp/seller-registration/

Register as an Importer: https://www.tradologie.com/registration

---

?Bibliography:?

1. USDA Foreign Agricultural Service, 2023. "India: Grain and Feed Annual Report."

2. International Food Policy Research Institute (IFPRI), 2023. "Global Rice Market Outlook."

3. Rice News Today, 2023. "Global Rice Market and the Impact of India's Export Ban."

4. Economic Times, 2023. "India's Rice Export Ban: Impact and Future Plans."

5. Business Standard, 2023. "Indian Exporters and the Rice Export Ban."

6. Food Corporation of India (FCI), 2023. "Rice Production Forecast for 2023."