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Indian rice price increases and concerns about food inflation

India’s decision to limit rice exports is anticipated to increase the price of the staple globally and cause rival wheat and corn markets to soar, increasing worries about food inflation.

Prices for rice in major exporters According to traders and economists, prices in India, Thailand, Vietnam, and Myanmar are expected to climb, which would hurt food importers who are already paying more because of bad weather and the Russia-Ukraine war.

India, the world’s largest exporter of the grain, tried to increase supplies and stabilise local prices on Thursday after planting was hampered by below-average monsoon rainfall by banning the sale of broken rice and imposing a 20% levy on exports of various grades of the grain. 

According to Phin Ziebell, an agriculture economist at National Australia Bank, “there will be significant challenges on food security across a number of countries.” “The grains complex could experience additional improvement in global fundamentals.”

The market was supported by India’s action and rumours of Russia’s limitations on Ukrainian grain supplies as Chicago wheat prices increased on Friday, on track for a third straight weekly gain.

Ole Houe, director of advice services at agribusiness brokerage IKON Commodities in Sydney, declared that this was an inflationary move for food prices. “This could lead to a spike in the price of corn and wheat.”India competes with Thailand, Vietnam, Pakistan, and Myanmar for market share of more than 40% of the world’s rice shipments.

According to a dealer located in Singapore, prices in Myanmar should increase by $50 per tonne while suppliers in Thailand and Vietnam will offer greater prices.

Prior to India’s decision to impose export limits, the price of five percent broken rice in Myanmar was quoted at $390 to $395 per tonne, free on board. Prices for 5% broken white rice were reported to be around $348 per tonne in India.

The judgement will have an influence on trade flows because white rice in India costs $60–$70 less per tonne than it does in Thailand, according to Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association.More orders for rice from Thailand and Vietnam will come in, he said. We need to wait and see how long India’s strategy will last because if it does, the demand for Thai rice exports would rise.