India, the world’s biggest rice shipper, will likely restrict some exports as domestic supply is under threat, according to people with knowledge of the matter, a move that risks adding to the chaos in global food markets.
The government is discussing curbs on broken rice exports, which account for almost 20% of India’s shipments abroad, as local prices have soared, said the people, who asked not to be identified as the information is private. Talks are in advanced stages and a decision may be announced soon, the people said.
A spokesperson for the food and commerce ministries declined to comment. The finance ministry didn’t immediately respond to a request for comment.
India accounts for 40% of global rice trade, and restricting exports will deal a further blow to countries grappling with a cost-of-living crisis and worsening hunger. It will have implications for the billions of people that depend on the staple, with about 90% of the world’s rice grown and consumed in Asia.
Unlike wheat and corn prices, which surged after Russia’s invasion of Ukraine, rice has been subdued due to ample stockpiles, warding off a bigger food crisis. Back in 2008, prices soared above $1,000 a ton, more than double the level now, as India and Vietnam banned exports, causing panic over supplies.
Broken rice is mainly used for animal feed or to produce ethanol in India. Prices have jumped this year on increased export demand. Top buyers include China, which uses it mostly for livestock feed, and some African countries, which import the grain for food.
Shares of Indian rice producers and exporters tumbled on expectations of the curbs. KRBL Ltd., one of the the biggest shippers, sank as much as 8.8%. LT Foods Ltd. declined about 7.5%, while Chaman Lal Setia Exports Ltd. fell 3%.
India has already restricted wheat and sugar exports, sending shock waves through global markets as it signalled an escalation in food protectionism that’s seen countries choke off flows of locally-grown supplies to the world. That helped to send world prices for kitchen staples to fresh records, although they have declined recently as the outlook for global crops improved.