Global Rice Shortage Intensifies as India Tightens Export Restrictions
The global rice market is currently grappling with a severe shortage, the worst experienced in the last two decades. The primary cause of this shortfall can be traced back to India’s export restrictions. With a significant 40% contribution to the world’s rice exports, India’s export policy shifts have a profound effect on global food security. In September 2022, the country began by banning the export of broken rice and imposing a 20% duty on certain rice varieties.
India’s Export Restrictions and Global Impact
By July 2023, the restrictions had extended to include a ban on the export of plain, white, long-grain rice. This variety is extensively shipped to nations in Africa and Southeast Asia. Consequently, these export bans have led to a surge in rice prices by 15% to 20%, reaching a record high in nearly 12 years.
The driving force behind India’s actions is a bid to ensure an ample domestic supply to lower consumer prices and address its own food insecurity issues. However, these bans have resulted in a significant blow to food security in developing countries that heavily rely on Indian rice imports.
Rising Global Rice Prices: A Multi-faceted Problem
The hike in global rice prices cannot be attributed solely to India’s export bans. The stable market prices for rice have not kept up with the escalating costs of energy and fertilizer. This disparity is creating additional pressure on the already strained global rice market. For instance, in the U.S., rice farmers are grappling with profitability challenges due to these global price discrepancies.
U.S. Intervention to Support Rice Farmers
Recognizing the potential disaster that the failure of U.S. rice farmers would represent, Congress has stepped in with a solution. A total of $250 million in supplemental funding has been approved to support U.S. rice farmers and prevent them from going under. This move signifies the critical role of governmental intervention in ensuring the survival and sustainability of the agricultural sector amidst global crises.
Source Link: https://bnnbreaking.com/world/india/global-rice-shortage-intensifies-as-india-tightens-export-restrictions/
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