News in brief:
– India’s export of premium basmati rice has plummeted due to a surge in freight costs following Red Sea attacks, impacting global availability.
– Local farmers in Nigeria and other importing nations face challenges due to the scarcity of Indian rice, with potential price hikes and food shortages looming.
India, the world’s leading rice exporter, faces a significant drop in premium basmati rice exports, impacting global rice availability, according to a news report by South China Morning Post.
The current crisis stems from a surge in freight costs due to heightened tensions in the Red Sea, where Houthi militants have targeted commercial ships, doubling shipping rates.
Nigeria, a significant importer of Indian rice, is feeling the pinch as premium basmati rice shipments have halved compared to last year. The spike in freight costs has a direct impact on the availability and affordability of imported rice, affecting local farmers and consumers.
Middle East unrest and shipping disruptions
The Red Sea attacks, allegedly by Iran-backed Houthi forces, have disrupted global shipping, leading to delays and increased shipping times for cargo from India to the Middle East. This escalation in violence has resulted in a three to four-week extension in shipping times, affecting the crucial market for India’s basmati rice exports.
Indian basmati rice prices have soared to around $950 to $1,800 per tonne, while exported parboiled rice reached a record high of $533 to $542 per tonne due to limited supplies and steady demand. Private traders are facing challenges as state-run agencies prioritise domestic needs, causing potential food inflation concerns.
Impact on Southeast Asia and West Africa
The repercussions extend beyond India, affecting Southeast Asian countries like the Philippines and Malaysia, along with West African nations such as Nigeria, Ivory Coast, and Senegal. These regions heavily rely on Indian rice imports, and disruptions in the supply chain pose challenges to local farmers and food security.
The global rice shortage is further exacerbated by factors like El Nino affecting key producing regions in China and Indonesia, wars in Israel-Gaza and Ukraine, and slow output cuts by OPEC producers impacting oil prices. The ongoing geopolitical events and climate change contribute to uncertainties in the rice market.
