America’s rice producers and exporters will benefit from India’s recent decision to ban exports of white rice as global demand for U.S. rice will likely rise. The higher world demand will temporarily lift prices for U.S. rice growers, and the industry is well-positioned to meet higher demand for exports. However, CoBank says the short-term benefits of India’s rice export ban will give way to the longer-term consequence of an oversupplied global market and severe price correction when the ban is eventually reversed. New research from CoBank’s Global Knowledge Exchange says higher global rice prices resulting from the export ban will push other countries to expand rice production, increasing global supplies. When India does lift its export ban, the country’s surplus of rice will get dumped on the world export market. That means world rice prices will overcorrect from the sudden boost in supplies. India’s government imposed the ban on July 20.
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