Global Rice News

India’s Rice Output Expected to Drop, Leading to Potential Export Curbs

India, the world’s largest rice exporter, is facing a drop in rice production for the first time in eight years. The decrease in output has raised concerns that the Indian government may impose restrictions on rice exports to control food prices ahead of elections. The ban on exports of non-basmati white rice in July has already caused global prices to surge.

The crop’s condition is uncertain due to an uneven monsoon, and various forecasts predict a potential 8% decline in output compared to the previous year’s record. The decrease in output, along with high domestic rice prices, has left farmers and traders worried about further export restrictions.

Farmers like Ramkali Bhargav in Uttar Pradesh have faced challenges with their rice crops due to unpredictable weather. Heavy rain and winds flattened her rice crop just before harvest. She mentioned that if the rain had come a bit later, their yields could have been significantly higher.

The decrease in rice production in India affects governments and consumers across Asia and Africa who rely on the staple. India’s export restrictions, which account for 40% of global rice trade, have resulted in a shortage of rice supplies. The situation is further exacerbated by low inventories in other key exporting countries like Thailand, Vietnam, Pakistan, and Myanmar.

The Indian government is sensitive to food prices, especially during election seasons. Even a slight decrease in production is seen as a justification for maintaining export restrictions. The government has not indicated any plans to lift restrictions on rice grades in the near future.

Industry experts predict a decrease of around 7% to 8% in India’s rice output for the current year. However, the Rice Exporters Association expects a smaller drop of around 2% to 3% due to the beneficial impact of heavy rain on late-planted crops in certain areas.

The winter-sown rice crop is expected to contribute significantly to the overall decline in production. Output from this crop is anticipated to decrease up to 20% due to lower water levels in reservoirs. India’s main reservoirs are currently at 71% capacity, compared to 89% last year.

Inflation is a crucial issue in India, and the government has taken several steps to control prices, including export bans on wheat and restrictions on sugar and onion exports. Despite these measures, local rice prices remain approximately 15% higher than the previous year.

The government is considering extending its program to provide free or subsidized cereals to over 800 million people, with the declining wheat stocks leading to increased reliance on rice.

Export bans from India have led to increased exports from Thailand and Vietnam, but these countries have limited surpluses to meet the demand. If India continues to maintain the export ban, it could further impact the supply gap and lead to even higher prices.

Despite the challenges faced by farmers, they remain hopeful for better returns with the upcoming wheat crop. However, the drop in rice output and potential export curbs continue to be a concern in the industry.

Source: [The Hindu](https://www.thehindu.com/)