India can emerge as key rice supplier as global production falls 9% and demand rises 14%: IREF

New Delhi: India is well-positioned to capitalize on rising global demand for rice, as production is anticipated to decline by 9 percent while demand is expected to surge by 14 percent, according to Dev Garg, National Vice President of the Indian Rice Exporters Federation (IREF). Garg highlighted that India possesses ample rice stocks to meet global demand, despite concerns over lower production, rising fuel costs, and fertilizer shortages due to the El Nino impact and Iran war crisis.

With global rice production projected to fall by 9 percent and demand to rise by 14 percent, the significance of this development cannot be understated, as rice is a staple crop for over 35 percent of the world's population. India, which produced 151 million metric tons of paddy last year, is now the world's largest rice producer, surpassing China. The country also holds the title of the largest rice exporter, with around 22 million metric tons shipped out.

India currently holds a surplus of approximately 270 lakh metric tons of rice above its buffer stocks, a surplus of about 5 million metric tons more than its total exports. This surplus will only increase as India's rice production estimates have been revised from around 156 million metric tons to a more modest 146-147 million metric tons due to the El Nino impact and other challenges.

Despite this reduction, India remains in a favorable position with a large surplus stock expected to surpass 40 million metric tons this year, almost double the country's annual exports.

Several major rice-producing nations, including Vietnam, Thailand, and Pakistan, are facing pressure and are turning to India for their rice needs. Garg believes this presents an excellent opportunity for India's agricultural sector to expand its international footprint. However, higher fuel and fertilizer costs pose a concern for the global rice trade, with marine fuel costs surging from around USD 400-500 to USD 1,300-1,400, thereby pushing up transportation costs and impacting consumer prices in importing countries.

Global wholesale rice prices have risen by 15 percent over the last four months, and this upward trend is expected to continue as production declines and production costs increase. More than 60 countries worldwide rely on Indian rice for their domestic requirements, and higher prices could put additional strain on these nations, forcing them to spend more on food imports.

Despite these challenges, Garg remains optimistic, asserting that India is unlikely to experience a rice shortage and should seize the situation to strengthen its position in the global market. He emphasized that rice should be treated as a national strategic asset due to the dependence of over 60 countries on Indian rice. Garg urged Indian farmers and exporters to leverage this opportunity by increasing their exports and global presence, considering rice a critical component of India's strategic assets.