SINGAPORE: Global rice importers are likely to seek direct deals with governments in exporting countries as India’s ban on shipments of a key variety is squeezing supplies and igniting concerns over food security.

Buyers from Africa to Asia are likely to scramble for rice shipments as supplies tighten in coming months following India’s decision last week to ban non-basmati white rice exports. The ban will cut availability of the staple on world markets by about a fifth, traders and analysts said, and could lead to importers seeking more government-to-government deals to overcome shortages and tame spiralling prices.

“Export restrictions inherently reduce trust in the dependability of international trade,” said Shirley Mustafa, rice market analyst at the UN’s Food and Agriculture Organisation (FAO). “Thus, they could result in importing countries looking at government-to-government deals to ensure supplies.” While announcing its export ban last week, India has left the door ajar for such deals, saying that it will consider meeting the requirements of countries in need of rice supplies.

INDIA’S GOVERNMENT DEALS

Last September, India banned exports of broken rice in a bid to cool domestic prices, but since then official data shows the country approved sales of around one million metric tons of broken rice to Indonesia, Senegal, Gambia, Mali and Ethiopia.