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July 2024

Global Rice Market Crisis: Unravelling the Impact of India’s Export Restrictions

The global rice market is caught in a severe shortfall, the most acute in 20 years. This crisis has been primarily triggered by India’s export restrictions on rice, resulting in a 2 million tonnes shortfall and potentially reducing carryover stocks by 5 million tonnes. Rice, a critical staple feeding more than half of the world’s population, is witnessing a crisis threatening food security, especially in developing countries that heavily rely on India’s rice exports.

India’s Export Restrictions and the Domino Effect

In September 2022, India initially banned exports of broken rice and imposed a 20% duty on select rice varieties. By July 2023, the situation worsened as India banned exports of plain, white, long-grain rice. These measures, which India undertook to safeguard domestic food security and stabilize rice prices for local consumers, have ricocheted across the globe. India’s stronghold on the rice market, accounting for 40% of global trade, has led to a surge in global rice prices by 15% to 20%, marking the highest point in nearly 12 years.

The Global Impact: Trade and Livelihoods at Stake

The ban has not only disrupted trade relationships but has also endangered the livelihoods of millions of farmers across the world. The United States, where rice farmers grapple with fluctuating rice prices and escalating input costs like energy and fertilizer, is feeling the ripple effects. To prevent U.S. rice farmers from buckling under these pressures, Congress has allocated $250 million in supplemental funding.

Unraveling the Interconnectedness of Global Food Systems

The ongoing crisis in the rice market underscores the intricate balance between national food security policies and the interconnectedness of global food systems. As the world navigates this delicate impasse, the challenge is to ensure that national policies do not undermine global food security and trade. This crisis may serve as a wake-up call to revisit and reassess the existing structures and policies governing global food systems. QR Code

Published Date: January 21, 2024

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