India accounts for more than 40% of global rice exports The Indian government Thursday prohibited the export of non-basmati white rice with immediate effect this was seemingly in response to both a rise in domestic prices and decreased sowing in several key rice-producing states because of erratic monsoon. According to food ministry data, the retail price of the grain climbed about 15%  in Delhi this year while the average nationwide price gained more than 8%. Shipments will be allowed on the basis of permission granted by the government to other countries to meet their food security needs and based on request of their governments, the notification said.  The latest Indian government move, which has already imposed restrictions on wheat and sugar exports, would affect a large portion of global rice trade. Rice is a staple food for about half of the world’s population, with Asia consuming about 90% of global supply.    Why India is crucial to the global rice trade India accounts for more than 40% of global rice exports, which amounted to 55.4 million metric tons in 2022. India's rice shipments in 2022 were more than the combined shipments of the Thailand, Vietnam, Pakistan and the US, the next four big exporters of the grain. Over 140 countries are net importers of India non-basmati rice. Benin, Bangladesh, Angola, Cameroon, Djibouti, Guinea, Ivory Coast, Kenya and Nepal, having rice a staple food, are key buyers of non-basmati Indian rice. India exported 17.86 million tons of non-basmati rice in 2022. In September 2022, Indian government banned the exports of broken rice and imposed a 20% duty on exports of various grades of rice as the country was itself grappling with high prices of food grains.  The Indian government has not put any restrictions on the export of basmati rice which stood at 4.4 million tons in 2022. Iran, Iraq and Saudi Arabia mainly buy premium basmati rice from India. Indian farmers plant paddy rice twice in a year. Summer-sown crop planting starting in June accounts for more than 80% of the total output, which was 135.5 million tons in the 2022/23 crop year. In winter months, paddy rice is mainly cultivated in central and southern states. Monsoon: The late arrival of the monsoon led to a large rain deficit up to mid-June. And while heavy rains since the last week of June have erased the shortfall, they have caused significant damage to crops. The area under paddy could drop marginally in 2023 because of erratic monsoon rainfall distribution.

Maksym Belchenko/iStock via Getty Images Wheat futures on the Chicago Board of Trade swung between losses and gains before finishing flat Thursday, providing hope that crop markets are starting to settle down after Russia's escalation of the war in Ukraine. U.S. wheat had surged more than 11% in the previous two sessions as Russia pulled out of the Ukraine grain deal, which will force supplies to world markets through narrower and more cumbersome avenues. Both countries warned that ships headed to each other's ports could be considered military targets, marking a new phase of the conflict that began in February 2022. Ukraine has increased reliance on its Danube River ports and rail and road routes via the European Union throughout the war, but a heatwave fanning across part of southern Europe is lowering river levels and restricting export capacity, which will make shipping grain even more difficult. Cutting off the Black Sea ports will cut Ukraine's monthly export capacity from 7M-8M tons to a maximum of ~4M tons, according to Argus Media agriculture analyst Alexandre Marie. CBOT wheat futures (W_1:COM) for September delivery ended virtually unchanged at $7.27 1/2 per bushel, while December corn (C_1:COM) closed -1.3% to $5.46 per bushel and November soybeans (S_1:COM) settled -0.3% at $14.03 1/4 per bushel, with forecasts predicting wetter weather in the Corn Belt over the weekend. ETFs: (NYSEARCA:WEAT), (CORN), (SOYB), (DBA), (MOO) The drop in CBOT grain futures was linked to a wetter weather outlook for the next few days. Ag research firm DTN forecasts isolated and scattered showers in growing areas over the weekend, although conditions are expected to turn back toward hot and dry next week.