In 2024, Indian rice exports may face many challenges

S&P Global Commodity Insights analysis said that measures taken by the Indian government in 2023, including ban on non-Basmati white rice exports, imposition of 20% duty on parboiled rice exports and minimum export price for Basmati rice, will continue to impact the rice market.

India's rice export restrictions come amid a sharp rise in domestic rice prices and the government's desire to ensure adequate domestic supply.

Most industry experts predict the Indian government will not ease restrictions before the general election scheduled for April-May 2024.

In addition, the 2023-24 autumn rice output decreased due to the impact of the El Nino weather phenomenon causing drought, further complicating the supply situation.

The US Department of Agriculture forecasts India's total rice production in the period from October 2023 to September 2024 at 128 million tonnes, down from 135.5 million tonnes last year.

Despite the export restrictions, domestic rice prices remain high. Millers and exporters expect prices to remain high until the next autumn harvest.

West Africa, a major consumer of Indian rice, is expected to cut demand due to high prices. In 2023, many West African buyers have imported large quantities of rice in anticipation of export restrictions. Demand from Southeast Asia and some Gulf countries is expected to be stable.

One positive factor is that rice stocks at the Food Corporation of India stood at 56 million tonnes as of December 1, 2023, up 15% year-on-year.

With inventory levels well above the government's buffer stock standard, there are hopes that export restrictions will gradually be eased.

Accordingly, exporters are optimistic that as domestic purchasing activities begin to slow down this season, export supplies will improve.