Trading in Asia has been paralysed by India’s limitations on rice exports as buyers look for substitute supply in countries like Vietnam, Thailand, and Myanmar where sellers are delaying deals due to rising prices, according to industry officials.
India, the largest exporter of the crop in the world, tried to increase supplies and stabilise prices on Thursday after sowing was hampered by below-average monsoon rainfall by banning shipments of broken rice and imposing a 20% levy on various other types.
The export of rice is the latest in a long list of goods that have been restricted this year as governments battled to boost supplies and combat inflation amid trade disruptions brought on by the conflict in Ukraine.Since India’s announcement, rice prices in Asia have increased by 5%, and this week they are predicted to increase even more, deterring both buyers and sellers.
“Rice trade in Asia is nonexistent. According to Himanshu Agarwal, executive director at Satyam Balajee, India’s largest rice exporter, traders don’t want to make decisions hastily.
“India accounts for more than 40pc of worldwide shipments. Therefore, no one can predict how much prices would increase in the next months.
halting of loading
Due to purchasers’ refusal to pay the new 20 percent export charge levied by the government in addition to the agreed-upon contract price, rice loading at Indian ports has ceased, trapping roughly one million tonnes of grain there.
According to Nitin Gupta, vice president for Olam India’s rice division, shippers are now organising pending contracts even though some buyers are willing to pay more for new contracts.
Buyers are attempting to get supply from rival Thailand, Vietnam, and Myanmar, who have hiked the price of 5 percent broken white rice by about $20 per tonne over the previous four days, traders claimed, while Indian exporters stopped signing new contracts.
