India’s smaller rice crop paves way for prolonged export curbs

The weaker output along with persistently high domestic rice prices ahead of five State elections this month and a general election next year have left farmers and traders worried that the government will prolong restrictions on exporting the grain.

For the first time in eight years, India’s rice output is expected to drop this year, raising the prospect that Prime Minister Narendra Modi’s government will extend curbs on exports of the grain to keep a lid on food prices ahead of elections.

Production in India, the world’s largest rice exporter, is under unusually intense focus after New Delhi banned exports of non-basmati white rice in July, sending global prices surging.

However, the state of the crop is hard to predict following an uneven monsoon. Output could fall as much as 8% from last year’s record despite an increase in area under paddy, according to various forecasts.

The weaker output along with persistently high domestic rice prices ahead of five State elections this month and a general election next year have left farmers and traders worried that the government will prolong restrictions on exporting the grain.

Ramkali Bhargav, a farmer in Uttar Pradesh, said her paddy fields had recovered from an early season dry spell followed by floods. But just before harvesting, heavy rain and winds flattened her rice crop.

“If the rainfall hadn’t occurred for another fortnight, our yields could have been at least 30% higher,” she said, slicing a sickle through toppled paddy in Chharasi village.

The crop loss is a problem for governments and consumers across Asia and Africa that have struggled to secure supplies of the staple since prices in the global market jumped to a 15-year high after India restricted its rice exports, which account for 40% of global rice trade.