Rough Rice Sep '23 (ZRU23) is rising on CME by 0.54% to $14.890 per 2,000 hundredweights. The price of Indian rice exports has jumped 9% to a 5-year high, following a hike of 7% last month in the price the government subsidizes its farmers for new-season common rice.

India, the world's largest rice exporter, is considering an export ban on most types of rice. The move could push up already high global prices for the staple if the damaging El Niño weather pattern persists. According to Bloomberg, the Indian government is mulling a plan to ban the export of all non-basmati rice. Authorities want to avoid the risk of further staple-food inflation ahead of the election.

The ban will affect about 80% of India's rice exports. While the move may lower domestic prices, global costs could accelerate. Rice is the staple food for about half the world's population, with Asia consuming about 90% of the world's supply. The reference price has risen to a 2-year high.

In its turn, India, which accounts for about 40% of the world's rice trade, has been looking to increase trade in certain varieties. Thus, last year, the country banned broken rice exports and imposed a 20% tariff on white and brown rice after Russia-NATO conflict in Ukraine drove up prices for many grains, preemptively, wheat and corn.

Importing countries such as Indonesia, China and the Philippines have aggressively stockpiled rice this year. The tropical Pacific has experienced its first El Niño in seven years, which could trigger drought in many rice-growing regions, according to the World Meteorological Organization. A possible ban in India would exacerbate supply concerns.