What is the impact of India’s rice ban?

India’s rice ban may trigger a rise in global food prices. India has been affected by the El Ni?o phenomenon, which has damaged rice production. In order to curb the soaring domestic rice prices, India has decided to directly ban most of the rice. of rice exports.

1. India’s rice ban has caused global food prices to rise

As the world’s largest rice exporter, India’s rice ban has affected global food prices. The retail price of local rice in India has increased by 11.5% in the past year, and by 3% in one month.

India’s rice exports last year reached 22.2 million tons, accounting for more than 40% of the world’s total exports, and even exceeded the total volume of some other rice exporting countries, such as Thailand, Vietnam, and Pakistan. And the United States and so on.

During this ban, India’s fragrant rice exports were not affected, but Indian broken rice was affected. Because these two varieties directly account for nearly half of India’s rice exports, and the price is relatively cheap, the main export countries are the Philippines, Indonesia, Angola and other African countries. So for these African countries, the export ban on Indian rice may have an impact on rice prices in these countries.

The continuous rise in global rice prices has made many importers worry that the dry weather caused by the El Ni?o phenomenon will affect rice production, so they are stocking up on rice in large quantities. According to relevant climate information released by the World Meteorological Organization, the El Ni?o phenomenon has occurred in the tropical Pacific for the first time in seven years. This phenomenon may lead to dry weather in Southeast Asia.

Although this phenomenon will bring rainfall to some parts of India, Thailand, the second largest exporter of crops, will be affected by this climate phenomenon and may cause drought problems.

2. India’s imposition of tariffs may lead to serious food inflation

After India banned the export of broken rice, it imposed restrictions on the export of milled rice, hulled brown rice, semi-polished rice and fully polished rice. Rice is subject to a 20% tariff. Because of this export tariff, global rice and grain prices continue to rise. Since the outbreak of the Russia-Ukraine dispute, global food prices have experienced great changes, especially the prices of wheat, corn and soybeans have hit new highs.

The increase in tariffs on rice in India is undoubtedly reminiscent of the food crisis in 2008. At that time, India, the world's second largest rice exporter, introduced a rice ban, causing many Asian countries that rely on rice as a staple food to follow suit. The ban on rice exports caused the price of rice to rise by 300% in just four months. In the first half of this year, the price of rice has already risen a lot, so the implementation of India's new tariffs may cause more countries to Restrictions on grain exports have further led to serious grain inflation.

3. The impact of India’s rice ban on China

Although India’s rice ban has led to an increase in global food prices, it has had little impact on China because China has sufficient food reserves. Broken rice is highly substitutable. China imports rice from India every year. However, China has basically become self-sufficient in grains and its food rations are safe.

The reason why China chooses to import Indian broken rice is actually because China has quota restrictions on rice imports, but there is no quota limit on broken rice. After all, broken rice can be put into feed and can also be made into other foods. of food. In addition, China has also arrived at the autumn harvest season. Although grain production has been affected by drought and high temperatures in the summer, the overall production is basically the same as last year.