Global Markets: Rice – Global Exports Forecast to Top 50Mln Tons, Led by India

    Rice being harvested in Prairie County, Arkansas. Photo: Fred Miller, University of Arkansas

    The 2022 forecast for global rice exports is expected to exceed 50 million metric tons for the second year in a row, down only slightly from the 2021 record. The rise in global exports in recent years is driven by growing import demand, especially in Africa, including Nigeria and Cote d’Ivoire, and Asia, including China and Nepal.

    The additional demand has been predominately supplied by India, which has more than doubled its exports since 2019. While shipments for the next largest exporters, Vietnam and Thailand, are expected up for 2022, India still dominates global trade.

    India has ample supplies, with record production and near-record area harvested, as well as abundant beginning stocks. During the past decade, India has consistently increased its Minimum Price Support (MSP) for most supported commodities, including rice, leading to larger area dedicated to production.

    Additionally, record yields have led to record production. Furthermore, global demand for low-priced rice is currently strong, and Indian rice has remained well below other exporters’ prices for 2 years (see rice price graph on page 10). Finally, India has invested significantly in its deep-water ports, enabling it to ship in bulk in addition to the typical containers.

    Even with slightly lower imports for 2022, demand from certain major importers will support strong India exports. Top importer China has been purchasing significant quantities of Indian broken rice to supplement feed rations. Ironically, Vietnam, a large exporter, has also been importing significant quantities of India’s broken rice.

    India’s ability to supply both parboiled and regular white rice at competitive prices will also propel exports to Sub-Saharan Africa where imports are projected to grow. Indian fragrant basmati rice will continue to dominate the global market, particularly in the Middle East.

    Sri Lanka to Import Large Quantity of Rice Despite Attempt for Self-Sufficiency

    Amid a smaller crop and sharply rising prices, Sri Lanka rice imports are forecast to be the highest in 5 years.

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    Over the past few years, Sri Lanka has implemented various policies to seek self-sufficiency in rice production. The government offers a guaranteed price for paddy rice and fertilizer subsidies. However, in April 2021, the Sri Lankan government announced a ban on inorganic fertilizers and other agrochemicals.

    Producers did not have sufficient alternative inputs to support this suddent national shift to organic farming encouraged by the government. The ban was later lifted in November, but the lack of fertilizers affected the maha crop, which accounts for nearly two-thirds of annual production. Due to limited availability of inputs, yields declined, and the 2021/22 rice crop is forecast to be 14 percent smaller compared to the previous year.

    Sri Lanka’s economy has been significantly impacted by COVID-related macroeconomic factors. In April 2020, the government announced restrictions on imports of commodities including rice. With smaller output and restricted imports, Sri Lankan prices spiked to $790/ton in January, up 52 percent from September. Consumers are facing high inflation for this critical staple food.

    To reduce domestic prices, the government has cut the import duty to enable the Sri Lanka State Trading Corporation to import. The country has begun negotiating government-to-government agreements to import rice. Some agreements have already been made with India and Burma, two countries that have supplied Sri Lanka in the past. In addition, Sri Lanka has requested 1 million tons of rice from China.

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