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India, the world’s largest exporter of rice, has followed through on its threat: the country has just banned the export of broken rice and introduced a 20% tax on other varieties. A decision that creates disorder on the spot, but which does not seem to shake the market more than that for the moment.
« Since the announcement of the authorities, it is the souk in the Indian ports! “says a trader. Nobody knows if the boats can be loaded or if they can leave. Instruction has been given to authorize the already scheduled loadings until September 15, but the ministerial orders remain visibly vague as regards the details.
But one thing is certain, the rice that has already arrived at the port is sold, and cannot return to the producer. There is therefore a good chance that he will be able to leave in the next few days, confides our interlocutor, who is waiting for the weekend to see things more clearly himself.
Slight increase in Vietnamese and Thai rice
For the time being, the Indian decision has raised prices by 10 to 15 dollars, particularly in Thailand and Vietnam, the two other exporters behind India’s number one. Two countries that had been forced in recent months to match India’s cheap prices. While some are rubbing their hands, or even trying to speculate, the market has clearly not panicked for the time being.
The purchases continued on Monday and the paralysis of transactions announced yesterday was not yet relevant. Maybe because stocks are good. ” There is rice everywhere », say in unison the economists of the sector. Even in Africa! Whether in Senegal, a major customer of Indian broken rice, or in Côte d’Ivoire, reserves are five to six months. Not to mention the boats that are already on the water and those awaiting disembarkation in African ports.
The pressure on India will quickly mount
The Indian decision also comes as the new Asian harvest begins. A calendar that pleads for a moderate rise in prices. Because to make room for the new grains, the warehouses will inevitably have to be emptied in one way or another. “ In the rice sector, export restrictions are quickly put under pressure in the rice sector and this is why crises are never very long », explains Patricio Mendez del Villar, economist at CIRAD and specialist in the rice sectors. In 2007, India banned exports for three years, but the context was very different.
If the market today is hanging on the Indian export strategy, other factors will also be important in determining prices tomorrow. The state of the Asian harvests which is starting will be a key element to know the price structure until June 2023, “ because it is the bulk of the world supply that arrives on the market », explains the CIRAD expert. The other parameter is the Chinese appetite for broken rice, which has been huge this year.