World Agrochemical Network Chinese website reported: Earlier, India had just released news that it was considering an important measure that might ban the export of most rice varieties. On July 20, India officially promulgated a rice export ban, which will ban the export of white rice except basmati rice, and it will take effect immediately.
Although the market has been vaccinated against this, the "immediate effect" still caught people off guard and caused concerns in the global rice market. Because the current global rice price has hovered at a high point in the past 10 years, India's paper ban is likely to "add fuel to the fire". To be precise, global rice prices have been rising since last year. One of the main reasons is that after the outbreak of the Russia-Ukraine conflict, wheat, as an important ration, once caused supply concerns, so many countries began to rush to buy rice as a substitute.
Demand increases and rice prices rise.
On the other hand, under the influence of extreme weather, the risk of rice supply increases. Especially this year, the wind of El Niño is getting stronger and stronger, and El Niño has a serious drought impact on Southeast Asia and South Asia, such as India, which has already shown this tendency.
India's monsoon rains have been delayed this year until mid-June when there was a noticeable lack of rainfall, which has seriously affected planting progress. Originally, with the increase in domestic rice prices in India, the planting should increase accordingly, but as of now, the planted area of rice in India is still about 6% lower than last year. It is under the influence of these reasons that the global rice price keeps rising. Global rice inflation has risen from an average of 6 percent last year to 12 percent in June this year.
The price of rice in India is even hovering at a high level. According to the Indian government, the price of Indian rice snacks has risen by 11.5% in the past 12 months, and due to the continuous impact of extreme weather, it has risen again by 3% in the past month.
According to the Indian side, this ban was introduced precisely to stabilize the domestic rice price.
In fact, last year, India also introduced related policies to restrict rice exports. It imposed a 20% export tax on rice except parboiled rice and basmati rice, and banned the export of broken rice to ensure domestic food supply. But with little effect, exports not only did not decline but also increased. Therefore, the market does not know how much the ban can play in controlling prices, but this move will undoubtedly increase the supply risk in the global rice market, or further promote the rise of rice prices.
Because India is the world's largest rice exporter, India's rice exports will reach 21.5 million tons in 2021, accounting for more than 40% of the world's total rice exports, far exceeding other exporting countries.
As mentioned in the ban, the export of white rice other than basmati rice will be prohibited. In terms of varieties, it accounts for about 25% of the export varieties, but the export impact is at least half.
On the other hand, the law of the market is often that the more restricted it is, the more it will rise. The reason is that the so-called restrictions have stimulated demand even more. For example, many traders have begun to hoard rice. This has led to rising rice prices in Thailand and Vietnam. For example, Thailand's 5% broken rice has reached $545/ton, the highest since 2021. The quotation of rice with a broken rate of 5% in Vietnam has also risen to US$515-525/ton, which is also the highest record since 2021. Coupled with the speculative hype of capital, fueling the flames, it will boost the rise of global rice prices.
So, with the release of India's rice export ban, what impact will it have on the Chinese market? After all, my country is also one of the important buyers of Indian rice.
In fact, domestic rice has also risen, but this has nothing to do with the ban. my country's ration self-sufficiency rate is very high, especially rice, just like a big brother, despite the changing market conditions, but always sits firmly on the fishing boat.
However, recently affected by the weather, the risk of some rice in the south has increased, and the price has fluctuated to a certain extent. However, my country's rice production has been abundant year after year, and the stocks are abundant, so there is no basis for a sharp rise.
On the other hand, my country's rice self-sufficiency rate is high, and imports are mainly used for variety adjustments, and the amount of imports is limited.
Although my country's rice imports exceeded the quota for the first time last year, it was mainly due to the surge in imports of broken rice, which is mainly used for feed substitution. This year's import volume has dropped significantly. Data show that in the first half of this year, my country's rice import volume was 1.81 million tons, a year-on-year decrease of nearly 75%.
Therefore, although India's one-paper ban once again disturbed the global rice market, its impact on the Chinese market is very limited. However, we can't help sighing that the global grain market is constantly changing, and its changes and fluctuations will be very frequent in the next few years.
Source: AgroPages
