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    QONEQT in India

    09-Sep-2022 08:26 AM


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    India's rice curbs to lift prices, stoke food inflation worries

    SINGAPORE: India's decision to curb rice exports is expected to lift world prices of the staple and trigger a rally in rival wheat and corn markets, deepening concerns over food inflation.

    Rice prices in key exporters India, Thailand, Vietnam and Myanmar are set to rise, traders and analysts said, hitting food importers already suffering from higher costs due to adverse weather and the Russia-Ukraine war.

    India banned exports of broken rice and imposed a 20 per cent duty on exports of various grades of rice on Thursday as the world's biggest exporter of the grain tries to augment supplies and calm local prices after below-average monsoon rainfall curtailed planting.

    "There is going to be substantial stresses on food security across many countries," said Phin Ziebell, agribusiness economist at National Australia Bank. "Global fundamentals could see further upside across the grains complex."

    Chicago wheat prices rose on Friday (Sep 9), poised for a third straight weekly gain, as India's move and talk about Russia's restrictions on Ukrainian grain shipments underpinned the market.

    "This is an inflationary move for food prices," said Ole Houe, director of advisory services at agriculture brokerage IKON Commodities in Sydney. "This could trigger a rally in wheat and corn prices."

    India accounts for more than 40 per cent of global rice shipments and competes with Thailand, Vietnam, Pakistan and Myanmar in the world market.

    "Myanmar prices should go up by US$50 a tonne while suppliers in Thailand and Vietnam will be quoting higher prices," said one Singapore-based trader.

    5 per cent broken rice in Myanmar was quoted at about US$390 to US$395 a tonne, free on board, before India's decision on export restrictions. In India, 5 per cent broken white rice prices were quoted around US$348 a tonne.

    The decision will impact trade flows as India's white rice prices of the variety are about US$60 to US$70 per tonne cheaper than Thailand's, Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, told Reuters.
    Source: CNA
    #India