OUR India imposed export restrictions on several rice varieties today, which is likely to affect the global market as commodity prices rise after invasion of Russia in Ukraine.

India, which stands out as the world’s largest rice exporter because it controls about 40% of world trade, has imposed additional duties on a number of rice varieties but excluded basmati rice.

The Indian Ministry of Finance announced the news late on Thursday, saying “circumstances exist that require immediate action.”

Prime Minister Narendra Modi’s government has taken action with an eye on food security and inflation.

Rainfall in India this year has been uneven, raising concerns about reduced rice production and rising food prices at a time when the cost of imported food is rising.

Inflation is hovering around 7%, above the 4% to 6% target set by the Reserve Bank of India, which has raised lending rates three times this year in an attempt to keep prices down.

India imposed export restrictions on wheat and sugar this year, but failed to do so on rice.

In fiscal year 2020–21, India exported $8.8 billion worth of rice.

Vietnam and Thailand are the next largest rice exporters in the world and are expected to increase their exports.

^{Source: Financial Times.}