India’s rice exports are expected to soften due to increased buying prices set by the government. These buying prices set the price that the government will purchase rice from the local growers. The Indian government typically buys more than a third of the country’s rice supply at a fixed price. This price directly impacts prices paid by traders. As reported by Reuters in Commodity News this week, the price hikes guarantee an increase of 13% in the buying prices for Indian rice. While this offers a boost to local Indian farmers, it is likely it will also provide a market share advantage to Thailand and Vietnam, other significant rice producers.
India Rice Exports May Become More Expensive
It is expected that October will begin to show the effects of the guaranteed price increase. More expensive rice exports from India may result in a loss of market share in key Asian and African markets, or so traders speculate.
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