India, the world’s top rice exporter, is expected to maintain its curbs on overseas sales well into next year, a move likely to hold the staple grain at close to its highest price levels since the food crisis of 2008.
Lower prices and ample stockpiles have helped make India one of the top shippers globally over the past decade, recently accounting for almost 40 per cent of the total. African nations like Benin and Senegal are among the top buyers.
But Prime Minister Narendra Modi, who will seek re-election next year, has repeatedly tightened restrictions on shipments in a bid to curb domestic price rises and shield Indian consumers.
“As long as domestic rice prices face upwards pressure, the restrictions are likely to stay,” said Sonal Varma, chief economist for India and Asia ex-Japan at Nomura Holdings Inc. “Even after the elections, if domestic rice prices do not stabilise, these measures are likely to get extended.”
India has imposed export duties and minimum prices, while broken and non-basmati white rice varieties cannot be exported. Prices surged to a 15-year high in August in response, with buyers from the most vulnerable importing nations holding back purchases. Some sought waivers. In October, rice was still 24 per cent ahead of where it was a year ago, according to the UN’s Food and Agriculture Organization.
Modi’s government wants to ensure adequate supplies at home and to cool price increases, said B.V. Krishna Rao, president of the Rice Exporters Association, which represents the country’s shippers. He said the government would likely keep the export restrictions in place until the vote next year.
