Good monsoon outlook in India tempers fears of rice export curbs

Ample rice reserves in India, the world’s biggest exporter of the food staple, and expectations for bountiful monsoon rains should allay concerns about the possibility of any “drastic” measures to curb exports, according to National Commodities Management Services Ltd.

Global markets are fretting that rice may be next on the agenda after India restricted wheat and sugar exports. Unlike other commodities such as edible oils and wheat, which surged on supply disruptions after Russia’s invasion of Ukraine, rice has been broadly stable on bumper output and huge stockpiles.

“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, said on Bloomberg TV. There is “no reason to believe” that there will be any ban on rice shipments as India exports only about 20per cent of its output and there are sufficient stocks, he said.

“There maybe some quantitative restrictions, if there is a problem with the crop or problem with the weather going forward,” Chaudhry said during the interview with Juliette Saly and Rishaad Salamat. 

Crop prospects in the country of almost 1.4 billion people have brightened after the India Meteorological Department predicted a normal monsoon for a fourth year. The June-September rainy season, which waters more than half of the country’s farmland, also fills reservoirs that irrigate winter-sown crops. India is the second-biggest grower of wheat, rice, sugar and cotton, and the top buyer of palm, soybean and sunflower oils.

Rice is the one staple grain helping to keep the world food crisis from getting worse. India has been an aggressive rice shipper this year, after exporting 17.26 million tons of non-basmati rice in 2021-22, and 3.95 million tons of basmati rice, an aromatic grain used in dishes such as biryani and pilaf. 

The supply upheaval globally has given India “a foot in the door” to more markets for its goods, Chaudhry said. The country’s infrastructure and the whole supply chain need to be “smoothened, strengthened and shortened” to continue the access to these markets that have just opened up, he said.