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Global rice shortage looms as top exporter India’s supply woes worsen amid Red Sea attacks
- Exports of India’s premium basmati rice dropped by up to half this month from a year ago as freight rates doubled after a series of ship attacks in the Red Sea
- India’s lower rice shipments are likely to affect the Philippines and Malaysia in Southeast Asia and Nigeria, Ivory Coast and Senegal in West Africa, analysts say
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Global rice shortages are set to worsen, as India’s exports of premium varieties encounter fresh hurdles due to a surge in freight costs amid the Israel-Gaza war – and domestic shortages hit shipments of other types of rice.
Exports of premium Indian basmati rice last month were half of what they were a year ago, with traders blaming freight rates that have doubled following a series of attacks on commercial ships by Iran-backed Houthi militants.
Tensions have surged in the Middle East, with Houthi forces striking US and other targets in the Red Sea, disrupting global shipping. On Monday, Hamas fired its first volley of rockets into Israeli cities in weeks, proving it still had the capability to launch them after nearly four months of war.
India, the world’s top rice exporter, accounts for around 40 per cent of global rice shipments and exports to more than 150 countries. About 30 per cent of its shipments – or 12 per cent of total global trade – were affected after New Delhi in July banned exports of white rice and broken varieties, barring exceptions to address other nations’ food-security concerns.
“The problem in the Red Sea is escalating. A quick solution is not forthcoming, despite America’s intervention to stop Houthi attacks. People are in a wait-and-watch mode and are only exporting limited quantities,” said Vijay Setia, former president of the All India Rice Exporters’ Association.
The Middle East is an important market for India’s basmati rice exports. But Setia said the time it took to ship cargo from India to the region had increased by three or four weeks following the upsurge of violence in the Red Sea.
Indian basmati prices currently sit at around US$950 to $1,800 per tonne, traders say.
Biman Mukherji has more than two decades of reporting and editing experience in Asia, focusing on Indian and Asia business.
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