Global rice shipments could fall 4% due to India’s export restrictions

The central government has gradually restricted rice exports, and in July 2023, the government expanded its previous export ban on broken rice to include all non-basmati white rice.

"This caused global rice prices to rally to their highest level in over a decade. Last week, a minimum price for basmati rice exports was imposed and export duties were added to parboiled rice exports, which could further inflate global rice prices," says the latest update from BIMCO.

Filipe Gouveia, Shipping Analyst, BIMCO says: “Global rice exports could fall by at least four percent in 2023 because of India’s restrictions on exports and El Niño’s impact on supply. Replacing India’s rice exports is challenging as India accounts for almost 40 percent of the world’s export of rice. Low rainfall caused by El Niño is also weakening the outlook for global rice exports in 2024.”

Despite concerns that other rice exporters would follow India’s export restrictions, so far only Myanmar has imposed a temporary 45-day ban on exports. "Due to the higher prices, other exporters such as Thailand, Vietnam, and Pakistan have instead increased exports. However, this has not been enough to substitute India’s reduction."

Gouveia adds: “While rice constitutes under one percent of dry bulk cargo, India's export restrictions will add further pressure to the already tight global grain supplies. Overall, we estimate global grain shipments will fall between 1.5 percent and 2.5 percent in 2023."

Rice is transported by smaller bulk ships in the handysize and supramax segments. Compared to other bulk commodities, rice export volumes are small and there are no large import countries. Due to the lower volume transported to most destinations, rice can also be transported in containers, the update added.

“Despite the weak outlook for rice exports, global grain shipments could recover by between three percent and four percent in 2024. A rise in shipments of feed grains such as maize and soybeans could lead to this recovery. On the other hand, tight supplies of food grade grains like wheat and rice could continue to fuel inflation,” says Gouveia.