Good Monsoon Forecast, Bumper Harvest May Allay Fears Of Rice Export Curbs

The recent forecast by the India Meteorological Department (IMD) predicting a better-than-normal monsoon this year may alleviate concerns regarding the further possibility of more government measures to curb rice exports.

Moreover, the abundant rice reserves in India, which is the world’s biggest exporter of the food staple, should calm the frayed nerves across the globe fretting that it may be the next staple on the government’s agenda after banning wheat and restricting sugar exports.

Last month, the Centre banned sugar and wheat exports to check rising inflation and ensure the domestic availability of the commodities.

Although the government has clarified that it doesn’t plan to ban or curb exports of Basmati or Non-Basmati rice, speculations have been rife that the food stable might be banned.

However, with the bumper harvest of rice, the staple may also be pitched as a substitute for the promised wheat shipments by the government.

Contrary to other commodities of the likes of wheat and edible oils, whose prices soared on supply disruption following Russia’s invasion of Ukraine, rice has been broadly stable on massive stockpiles and bumper output.

“As things stand today, there is every reason to be optimistic for the crops to be good given the supportive monsoon,” Siraj Chaudhry, managing director at the warehousing and trading company, recently said on Bloomberg TV.

He added that there is “no reason to believe” that the government will ban the rice shipments as India exports only around 20 per cent of its output and there are adequate stocks.

India’s rice exports jumped to $9.6 billion in FY22, up from $8.82 billion in FY21 and $6.4 billion in FY20.

The retail prices of wheat, sugar, rice and edible oils are showing a declining trend following the measures taken by the government, comprising restrictions on exports of wheat and sugar, Food Secretary Sudhanshu Pandey said earlier this week.

“After a number of steps we took, it is showing its impact despite all challenges. I am not saying that challenges have suddenly vanished. They continue to be there. Despite those challenges, prices are behaving in the manner was intended due to those interventions,” Pandey told reporters.

This may give the government more elbow room to ease the curbs on these commodities.

Tags: rice, commodities, wheat, India, forecast, edible oils, Ukraine, monsoon, Russia, Basmati, exports, better-than-normal, harvest, food staple, prices, Non-Basmati