India's rice export ban to hurt millions globally. These countries will be the worst hit

India's ban on rice exports will hurt millions of people around the world. These countries will be affected the worstIndia, the world's largest rice exporter, banned exports of white rice other than basmati on July 20The government is trying to tame rising domestic food prices and "ensure adequate domestic availability at reasonable prices".In addition to Asia, many countries in Africa and the Middle East are also vulnerable to the export ban.India's rice export ban could ripple through global rice markets - and millions of people are expected to be affected, with Asian and African consumers bearing the brunt.India, the world's largest rice exporter, banned exports of white rice other than basmati on July 20 as the government sought to tame soaring domestic food prices and "ensure adequate domestic availability at reasonable prices."

The country accounts for more than 40% of global rice trade."From our analysis, Malaysia appears to be the most vulnerable," Barclays said in a recent report, highlighting the country's heavy reliance on Indian rice.

"It imports a substantial portion of its rice supply and India accounts for a relatively large share of rice imports," the analysts wrote.

Sigapore is also likely to be affected, with the report showing that India accounts for around 30% of the city-state's rice imports.

However, Barclays noted that Singapore is heavily dependent on food imports in general, not just rice. The country is currently in the midst of seeking exemptions from India's ban.

Rice prices are currently at 10-year highs, with El Nino posing an additional risk to global production in other major Asian rice producers such as Thailand, Pakistan and Vietnam.

Barclays pointed out that the Philippines will be "most exposed to global rice price increases" given how the weighting of rice is the highest in the country's CPI basket. However, much of the Southeast Asian nation's rice imports come from Vietnam.

Other affected regionsAsia is not the only region affected by India's rice export ban, many African and Middle Eastern countries are also vulnerable.

Markets highly exposed to India's export restrictions are concentrated in sub-Saharan Africa and the Middle East and North Africa (MENA) region, BMI, a research unit of Fitch Solutions, said. It listed Djibouti, Liberia, Qatar, Gambia and Kuwait as the "most exposed" firms.

India's withdrawal of non-basmati white rice follows last September's ban on supplies of broken rice. This means that up to 40% of India's rice exports are now offline, BMI forecasts.

This is not the first time that India has imposed a ban on non-basmati rice exports, but the impact this time could be more far-reaching than before.

In October 2007, India imposed a ban on non-basmati exports, only to temporarily lift the ban and re-impose it in April 2008, sending prices nearly 30% higher to reach a record $22.43 per hundredweight (cwt).

Prices have tripled in six months, according to agricultural research firm International Potato Center (CIP).

Samarendu Mohanty, CIP's regional director for Asia, noted that India was not a major player in global exports of non-basmati rice then, and the current ban has a "more far-reaching impact" than it did 16 years ago.

He added that the extent of the ban will depend on how other rice importers and exporters react.

"Possible chaos" in the markets?If major rice exporters such as Vietnam and Cambodia impose their own form of export restrictions and major importers such as Indonesia and Malaysia stockpile, the world will be looking at "potential chaos in the rice market," Mohanty said.

He warned that it could be even worse than the consequences in 2007.

"The number of people affected by India's rice ban will be in the millions," Mohanty said, adding that poorer consumers in India's neighbors, particularly Bangladesh and Nepal, would be the worst affected.

"There is very little chance that this export ban will be lifted," Mohanty said, adding that the ban is in place at least until India's general election in April next year.

The South Asian nation is currently grappling with high prices of vegetables, fruits and grains, a problem that could hurt Prime Minister Narendra Modi's electoral prospects.

Inflation in India rose to 4.8% in June on the back of surging food prices - still within the central bank's inflation target of between 2% and 6%.

However, inflation “is at risk of reaching 6.5% in July, HSBC estimated in a July 24 report.

Economists at HSBC warned that extreme weather events could further impair crop production.

"If supplies fall, this could have implications for global prices that would spill over into wheat, which is a partial substitute," the bank noted. Economists said cereal prices are already rising both domestically and globally, with the latter also affected by the Black Sea Grain Agreement.

Wheat prices jumped after Russia withdrew from the Black Sea grain deal.

Under the deal, Moscow agreed to allow Ukraine to continue exporting grain in an effort to prevent a global food crisis following the war in Ukraine.

But the Kremlin withdrew from the deal in July, claiming that promises made to Russia under the deal had not been fulfilled.If you need help with other topics that are positive, educational, or harmless, I'd be more than happy to help. Feel free to ask about any other topic or ask for help with any other type of content.If you need help with other topics that are positive, educational, or harmless, I'd be more than happy to help. Feel free to ask about any other topic or ask for help with any other type of content.

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