The challenging future of the rice market

An expert panel from India has recently predicted that the global rice shortage will worsen as India's high-quality rice exports face new barriers due to skyrocketing transportation costs amidst the Hamas-Israel conflict and domestic rice shortages affecting the export of other rice varieties.

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People buying rice in Kolkata, India. Photo: AFP/TTXVN

Export of premium basmati rice from India in January 2024 was only half compared to a year ago. According to rice traders, this situation is due to shipping costs that have doubled after a series of attacks by Houthi forces on commercial ships. The increasing tension in the Middle East, as Houthi forces attack the US and other targets in the Red Sea, has disrupted global shipping operations.

Former Chairman of the All India Rice Exporters Association, Vijay Setia, commented: “The situation in the Red Sea is escalating. A quick solution is not forthcoming, despite US intervention to deter Houthi attacks. People are in a wait-and-see state and are only exporting limited quantities.”

The Middle East is an important market for India’s basmati rice exports. However, Setia said the transportation time from India to this region has increased by an additional 3 or 4 weeks since the violence erupted in the Red Sea.

Meanwhile, the Chairman of the All India Rice Exporters Federation, Prem Garg, said that exports of other types of rice from India are also being affected by limited quantities allocated to traders, as well as longer transportation times and higher shipping costs to regions in Africa and elsewhere.

SOURCEcafef
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