In a significant move for the global rice market, India has resumed its non-basmati white rice exports, a decision that follows an increase in domestic rice inventories and the upcoming harvest of the new crop. The Indian government has placed a floor price of $490 per metric ton on non-basmati white rice exports, according to an official order released on Saturday. This move is expected to ease global rice prices and increase supplies, benefiting rice-importing countries and potentially lowering prices on the international market.

India, the world’s largest rice exporter, had previously imposed restrictions on rice exports in 2023 to stabilize local supplies and manage domestic prices amid fears of a poor monsoon season caused by the El Nino weather pattern. These restrictions were extended into 2024 to ensure sufficient supply before the national elections in April-June.

However, local rice production has improved significantly thanks to favorable weather conditions. The government-run Food Corporation of India reported on September 1 that rice stocks had reached 32.3 million metric tons, a 38.6% increase compared to the previous year. The surge in supplies has given the Indian government the leeway to ease its export restrictions.

Impact on Global Rice Prices:

India’s decision to allow non-basmati rice exports is expected to impact global rice markets significantly. According to traders, increased shipments from India will raise overall global supplies, forcing other major exporters like Pakistan, Thailand, and Vietnam to reduce their prices. The international rice market has been volatile in recent months due to export restrictions from India and rising demand.

Rajesh Paharia Jain, a New Delhi-based rice trader, noted that the move would likely bolster farm incomes in India’s rural areas and help India regain its dominance in the global rice market. “This decision will raise incomes in the countryside and allow India to reclaim its position in key international markets,” Jain said.

Easing of Other Rice Export Restrictions:

In addition to the resumption of non-basmati white rice exports, India has also taken steps to relax restrictions on other premium rice varieties. On Friday, the government reduced the export duty on parboiled rice from 20% to 10%, following earlier measures to ease export limitations on aromatic basmati rice. Indian farmers, who had raised concerns about limited access to lucrative markets like the Middle East, Europe, and the United States, welcomed the government’s decision to lift the floor price on basmati exports.

Increasing Rice Production and Exports:

India’s 2023 rice production has exceeded expectations, with farmers planting rice on approximately 41.35 million hectares (102.18 million acres) — a notable increase from last year’s 40.45 million hectares (99.95 million acres). This boost in production is expected to result in a bumper harvest, further increasing the country’s ability to export rice.

Despite the imposition of a 10% export tax on parboiled rice and a minimum price of $490 per metric ton for non-basmati white rice, Indian rice remains competitive on the global market. B.V. Krishna Rao, president of the Rice Exporters’ Association, emphasized that Indian white rice will continue to attract buyers, particularly as global supplies tighten. “Despite the tax and floor price, Indian rice will still be competitive in the international market,” Rao stated.

Global Market Outlook:

With India’s decision to resume exports, global rice markets are expected to see a shift in pricing dynamics. Major exporters like Pakistan, Thailand, and Vietnam may face pricing pressure as India re-enters the market with increased volumes. This shift could provide relief to rice-importing nations, many of which have been grappling with higher prices and tighter supplies.

Looking forward, experts suggest that India’s rice exports will play a crucial role in stabilizing global rice prices, especially as the country continues to expand its production and adjust its export policies.

India’s ability to resume non-basmati rice exports, coupled with recent relaxations on premium varieties, highlights the country’s key role in the global rice trade. As inventories surge and farmers prepare for a promising harvest, the Indian government’s decision will likely have far-reaching implications for rice markets across the globe.