The world’s largest rice exporter India has decided to halve exports to lower domestic prices. The decision has sent shock waves across the world – and is expected to lead to increased food security and inflation.
– We are witnessing a perfect storm, says economist David Ubilava, who also mentions the grain agreement in Ukraine and the weather phenomenon El Niño.
The delayed but heavy monsoon rains in India have led to poor rice harvests – and the price of rice has risen over ten percent in the country in a year. In order to soften the effect for the inhabitants, India has chosen to almost halve exports to the rest of the world.
India is the country that exports the most rice in the world, just over 40 percent of total exports, and the sudden stop looks set to have severe consequences in countries that depend on rice exports at reasonable prices. Among the countries expected to be worst affected are Malaysia, Bangladesh and the Philippines.
Even in the Western world, the effects are visible. The price of rice, which was already the highest in eleven years, has risen further, reports the UN’s Food and Agriculture Organization (FAO), reports The Telegraph.
An already fragile market
India’s decision comes at a time of global food unrest. The broken grain agreement for exports from Ukraine, the El Niño weather phenomenon, and ongoing conflicts around the world have further worsened the situation for the 783 million people whose basic food needs are not met, according to The UN’s latest report.
– We are witnessing a perfect storm, says David Ubilava, economist and visiting professor at Syfney University to Channel News Africa.
Wheat has also become more expensive since the agreement on exports from Ukraine across the Black Sea was not extended by Russia, although the world market price will not reach the highs in the spring of 2022.