Short and Long-term Impacts of India’s Rice Export Ban

An ag economist says there are both short and long-term impacts from India’s export ban on long-grain rice.  India says the ban, which excludes basmati and parboiled rice, is intended to curb food inflation in the country.

Tanner Ehmke, Economist with CoBank, says it could push global rice prices up.  “As those prices of rice increase, buyers around the world are going to be looking for alternatives,” he says.  “The U.S. by far is a cheaper alternative. As a result, the U.S. will be backfilling a lot of other markets, especially in our backyard in the Western Hemisphere.” However, he says the price spike could be temporary, especially when India reverses its ban on rice exports.  “Supplies will be dumped on a world market that is already swelling with rice supplies from other countries. The immediate impact is going to be an overcorrection and we’re going to see rice prices drop fairly significantly, I would imagine.”

U.S. Trade Representative Katherine Tai recently visited India to meet with business leaders and hold bilateral meetings with government officials to discuss this matter.  

EDITOR’S TAKE:

India’s rice export ban was in response to shorter supplies of wheat coming out of Russia and the Ukraine. Will it actually help tamp down inflation in the country? Difficult to say. What it will do is help with food security for India’s consumers. Once the threat passes, they will obviously begin unloading unwanted supplies onto the world market and that will drive down the price of rice globally. Until that day comes, U.S. rice producers are in line for much better financial results for at least this year and who knows how much longer. Take advantage of this situation by contacting or targeting any rice producers in your market area. They will be looking for new or qualified used trucks no doubt. Make sure you have your dealership and inventory on AgTruckTrader.com!