How far will rice-export ban help?

The Indian government has placed restrictions on rice exports–20% export duty on certain varieties and ban on exports of broken rice–to improve domestic supply because patchy rains have resulted in fall in production. But, according to Nomura, the export restrictions “current export restrictions may not necessarily improve the demand-supply situation materially, implying that there remains an upside risk to rice prices”. The brokerage believes there could be further curbs on the exports. “Rice accounts for ~4.4% of the overall CPI basket, thus we estimate a 5% increase in rice prices could lead to headline inflation rising by around 0.2pp,” wrote the analysts.