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

    CNA – 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 agribusiness economist at National Australia Bank Phin Ziebell. “Global fundamentals could see further upside across the grains complex.”

    Chicago wheat prices rose yesterday, poised for a third straight weekly gain, as India’s move and talk about Russia’s restrictions on Ukrainian grain shipments underpinned the market.

    A woman carrying a basket walks through a rice field in south Kashmir’s Tral town. PHOTO: CNA

    “This is an inflationary move for food prices,” said Director of advisory services at agriculture brokerage IKON Commodities in Sydney Ole Houe. “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 USD50 a tonne while suppliers in Thailand and Vietnam will be quoting higher prices,” said a trader.

    Five per cent broken rice in Myanmar was quoted at about USD390 to USD395 a tonne, free on board, before India’s decision on export restrictions. In India, five per cent broken white rice prices were quoted around USD348 a tonne.

    The decision will impact trade flows as India’s white rice prices of the variety are about USD60 to USD70 per tonne cheaper than Thailand’s, honorary president of the Thai Rice Exporters Association Chookiat Ophaswongse told Reuters.

    “More orders will flow for Thai and Vietnamese rice,” he said. “We have to wait and see how long this policy from India will go on for, if it is longer, it will increase demand for Thai rice exports.”

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