MUMBAI – India’s restrictions on rice exports have paralyzed buying and selling in Asia, with patrons scouring for various provides from Vietnam, Thailand and Myanmar the place vendor are holding off on offers as costs rise, trade officers mentioned.
India, the world’s largest exporter of the grain, banned shipments of damaged rice and imposed a 20% responsibility on exports of assorted different varieties on Thursday because the nation tries to spice up provides and calm costs after below-average monsoon rainfall curtailed planting.
Rice is the newest in a string of commodities which have confronted export curbs this yr as governments struggled to lift provides and struggle inflation amid commerce disruptions triggered by the Ukraine struggle. Rice costs have jumped 5% in Asia since India’s announcement and are anticipated to rise additional this week preserving patrons and sellers on the sidelines.
“Rice buying and selling is paralyzed throughout Asia. Merchants do not need to commit something in a rush,” mentioned Himanshu Agarwal, govt director at Satyam Balajee, India’s largest rice exporter.
“India accounts for greater than 40% of world shipments. So, no one is bound how a lot costs will rise within the coming months.”
Rice is a staple for greater than 3 billion folks, and when India banned exports in 2007, international costs shot to report highs of round $1,000 per ton.
India’s rice exports reached a report 21.5 million tons in 2021, greater than the mixed shipments of the world’s subsequent 4 largest exporters of the grain: Thailand, Vietnam, Pakistan and the US.
Rice loading has stopped at Indian ports and almost a million tons of grain are trapped there as patrons refuse to pay the federal government’s new 20% export levy on high of the agreed contract value. Learn full story
Although there are some patrons able to pay larger costs for brand spanking new contracts, shippers are at present finding out pending contracts, Nitin Gupta, vp for Olam India’s rice enterprise.
As Indian exporters stopped signing new contracts, patrons try to safe provides from rival Thailand, Vietnam and Myanmar, which have raised the value of 5% damaged white rice by round $20 per ton prior to now 4 days, sellers mentioned.
However even these suppliers are reluctant to hurry for contracts as they’re anticipating costs to strengthen.
“We anticipate costs to rise additional over the approaching weeks,” a dealer primarily based in Ho Chi Minh Metropolis mentioned.
Vietnam’s 5% damaged rice RI-VNBKN5-P1 was provided at $410 per ton on Monday, up from $390-$393 per ton final week, merchants mentioned.
China, the Philippines, Bangladesh and African nations reminiscent of Senegal, Benin, Nigeria and Ghana are amongst main importers of frequent grade rice, whereas Iran, Iraq and Saudi Arabia import premium grade basmati rice.
Provide disruptions from the COVID-19 pandemic and extra lately the Russia-Ukraine struggle has jacked up the costs of grains however rice has largely bucked the pattern as a result of bumper crops and ample inventories at exporters over the previous two years.
Patrons now worry India’s transfer may enhance rice costs and make the staple costly like wheat and corn, mentioned a Mumbai-based supplier with a worldwide buying and selling agency. — Reuters