Rice prices rise 10-15% in India on rising global demand

In a significant shift in the domestic rice market, rice prices have increased by 10-15% following the Indian government ’s recent decision to lift export restrictions on non-basmati rice. The move, announced on September 28, coincided with a surge in global demand for Indian rice, even as international prices fell by as much as 15%. The government’s measures have exempted non-basmati white rice from export duty and reduced the duty on parboiled rice to 10%. The duty cuts come quickly after the government removed the minimum export price for basmati rice.

Such moves come at a time when India has ample rice stocks in government warehouses, suggesting a strategic move to boost exports and capitalize on rising global demand. Global rice prices had earlier surged to their highest in more than 15 years following India’s decision last year to ban white rice exports and impose a 20% duty on parboiled rice.

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Now, as India re-enters the global market, competitors like Thailand and Vietnam are responding by adjusting their prices. Prices of some Thai rice varieties, which were selling for $800 a tonne, have fallen to $710 a tonne in the past few days. There is price pressure on rice supplied to global markets from Thailand, Vietnam and the Philippines as India opens up exports. India previously held 45% of the global rice market share, with top export destinations including Iran, Saudi Arabia, China, Benin and the United Arab Emirates.

However, the recent rise in domestic prices could pose a challenge to consumers, especially as the festive season approaches amid rising costs of edible oils, vegetables and other agricultural products. Parboiled rice exporters say domestic prices will remain stable until the new crop arrives. Global demand for rice is strong. This sentiment is reflected in the rising prices of popular rice varieties; for example, the price of Swarna rice, a staple exported to Africa and other regions, has increased from Rs 35 per kg to Rs 41 per kg in just one week.

Overall, the recent policy changes by the Indian government have created a tricky scenario: while opening up exports, they may inadvertently pressure domestic consumers with higher prices in the short term. As the market adjusts, all eyes will be on how these changes will impact the availability and affordability of rice in India during this important festival period.

According to rice exporters, suppliers from Thailand, Vietnam and Pakistan are responding to India’s move by lowering their export prices. India’s total rice exports in 2023-24 are expected to be $10.42 billion, down 6.5% from the previous fiscal year. This is mainly due to a decline in non-basmati rice exports following the government’s export curbs. However, as global demand for rice increases after the export curbs were lifted, domestic prices have started rising, which will hit consumers during the festive season along with rising prices of edible oils, vegetables and other agricultural products.

Source: https://congthuong.vn/gia-gao-tang-10-15-tai-an-do-do-nhu-cau-toan-cau-tang-351539.html