India s rice export curbs paralyse Asian as prices rise

Trading in Asia has been paralysed as buyers looking for alternative supplies from Vietnam_ Thailand and Myanmar as prices rises as a result of India's restrictions on rice exports.

The biggest rice exporting country banned shipments of broken rice and imposed a 20% duty on exports of various other types on Thursday as the country tries to boost supplies and calm local prices after below-average monsoon rainfall curtailed cultivation.

Rice is the latest in a string of commodities that have faced export curbs this year as governments struggled to raise supplies and fight inflation amid trade disruptions triggered by the Russian invasion of Ukraine.

Rice prices have jumped 5% in Asia since India's announcement and are expected to rise more keeping buyers and sellers on the sidelines.

"Rice trading is paralysed across Asia. Traders don't want to commit anything in a hurry_" said Himanshu Agarwal_ Executive Director at Satyam Balajee_ biggest rice exporter of India.

"India accounts for more than 40% of global shipments. So_ nobody is sure how much prices will rise in the coming months_" he added.

Rice is a staple for more than 3 billion people_ and when India banned exports in 2007_ global prices shot to record highs of around $1_000 per tonne.

India's rice exports reached a record 21.5 million tonnes in 2021_ more than the combined shipments of the world's next four biggest exporters of the grain: Thailand_ Vietnam_ Pakistan and the US.

Rice loading has stopped at Indian ports and nearly one million tonnes of grain are trapped there as buyers refuse to pay the government's new 20% export levy on top of the agreed contract price.

As Indian exporters stopped signing new contracts_ buyers are trying to secure supplies from rival Thailand_ Vietnam and Myanmar_ which have raised the price of 5% broken white rice by around $20 per tonne in the past four days_ dealers said.

But even these suppliers are reluctant to rush for contracts as they are expecting prices to strengthen.