Impact on Philippines, Indonesia, Thailand: Nomura

Rice production in India has fallen by 5.6% year on year as of September in light of below-average monsoon rainfall, which has affected harvest, Nomura said.

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India, the world’s largest rice exporter, has banned shipments of broken rice — a move that will reverberate across Asia, according to Nomura.

In a bid to control domestic prices, the government banned exports of broken rice and slapped a 20% export tax on several varieties of rice starting Sept. 9. 

Nomura said the impact on Asia will be uneven, and the Philippines and Indonesia will be most vulnerable to the ban. 

India accounts for approximately 40% of global rice shipments, exporting to more than 150 countries.

Exports reached 21.5 million tons in 2021. That’s more than the total shipment from the next four biggest exporters of the grain — Thailand, Vietnam, Pakistan and the United States, Reuters reported. 

But production has decreased by 5.6% year-on-year as of Sept 2. in light of below-average monsoon rainfall, which affected harvest, Nomura said.

For India, July and August are the “most crucial” months for rainfall, as they determine how much rice is sown, said Sonal Varma, chief economist at the financial services firm. This year, uneven monsoon rain patterns during those months have reduced production, she added.

Big rice-producing India states such as West Bengal, Bihar and Uttar Pradesh are receiving 30% to 40% less rainfall, Varma said. Although rainfall increased toward the end of August, “the more delayed the sowing [of rice] is, the greater is the risk that yield will be lower.” 

Earlier this year, the South Asian nation curbed wheat and sugar exports to control rising local prices as the Russia-Ukraine war sent global food markets into turmoil.

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India's rice production is likely to drop this year, says asset management firm

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