India, the largest rice exporter in the world, stunned the markets when it prohibited the export of non-basmati white rice. Non-basmati accounts for 25% of the rice exported by India. The decision has shocked the entire rice market because more than 40% of the world’s rice trade is with India. Government statistics show a nearly 10% increase in the domestic price of non-basmati rice in India just this month. The panic buying and stockpiling of Indian rice in numerous countries because of India’s decision has put further strain on the global supply chain. Because of this, the cost of rice has soared, having a tremendous effect on economies and consumers around the world.

India’s Export Ban Has Global Effects Since many countries heavily rely on India for their rice imports, the restriction on non-basmati white rice has far-reaching effects. The ban also triggered panic buying in many countries from U.S. to Canada and Australia. For instance, Singapore is particularly vulnerable to disruption because it imports 30% of its rice from India.

A leading trade body of India requested the government of India to allow the export of 1 million metric tons of a premium non-basmati rice variety favoured by overseas Indians.

Future prices for Indian rice have increased, showing that the ban’s impacts are also felt. A metric tonne of non-basmati rice, which cost about $330 US in September of the previous year, has increased to more than $450 US, according to pricing in the most actively traded Indian rice futures contract.

Countries are looking at alternate sources for importing rice and increasing domestic production capacities to lessen the effects of the export prohibition and guarantee stable rice prices around the world. Regional cooperation and trade partnerships are being pursued to ensure consistent rice supplies.