The global rice crisis continues to worsen, and we will soon be feeling it here in Australia with the cost of imported Jasmine and Basmati products from Thailand, India and Pakistan bound to rice sharply in coming months.
Crikey highlighted a 30% rise in Thai standard rice on Monday, which meant prices had doubled so far this year, and how India, Cambodia and other countries had cut back or banned rice exports. This was on top of soaring prices for wheat, soybeans, palm oil and corn.
More and more countries are introducing price controls and reporting social unrest. On Monday, the Indian Cabinet scrapped import duties on crude edible oils and banned all exports of non-basmati rice (amid a range of measures) to try and hit rising inflation, which is now at a 14-month high. Inflation is threatening not only the country’s economic recovery, but starting to cause political and social problems for national and state governments.
As India is the world’s third largest exporter (vying with the US), the ban and price increase will have a dramatic impact. India exports around four million tonnes a year, including around one million of fragrant basmati rice. The bulk of the exports go to the East Asia region and especially the Gulf and Africa.
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The move could have an impact on rice prices globally as the country is the third largest exporter of the grain – a staple food in many countries. The Indian government first imposed a total ban on non-basmati rice exports last October but exporter protests forced the ban to be lifted.
The danger is that India might have to import rice (all duties were eliminated last month) if exporters continue to drain stockpiles as they have been doing by shipping more abroad to take advantage of record prices.