Even as US President Donald Trump’s reciprocal tariffs send the world into a spin, India can look to tap an unlikely opportunity – the country can export rice to Mexico, Canada and other countries that import rice from the US. The reciprocal tariff regime could impact its rice exports and this could be a great opportunity for India, a rice-surplus country, according to Samarendu Mohanty, an acclaimed global rice expert.
Apart from Mexico, the US exports its rice to Central and South America, Japan, the Caribbean region, Canada and the Gulf region. The US exports 638,000 tonnes of rice to Mexico and 250,000 tonnes to Canada, which are the two countries most affected by increased trade tariffs of the US.
“While tariffs generally have negative impacts, Trump’s import tariffs on Canada and Mexico could benefit Indian rice exports. Canada and Mexico are large importers of US agricultural goods, including rice. If US rice becomes more expensive due to tariffs, Canada and Mexico might turn to Asian countries such as India, Pakistan, and Vietnam for their rice imports,” he said.
Affluent consumers
Talking on how Trump’s tariff war could boost the Asian sector at the Professor Jayashankar Telangana State Agricultural University (PJTSAU), he said any US tariffs on Indian imports such as basmati rice are unlikely to significantly reduce demand in the US because the primary consumers are relatively affluent.
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Mohanty received the World Rice Industry Global Service Award in 2023 for his contributions to the global rice industry.
Stating that India has emerged as a major player in the global rice sector, he said India’s exports crossed the 20 million tonnes, holding a share of 40 per cent of the 55-56 million tonnes (mt) of global trade in the staple grains.
Wheat impact?
“India’s rice production has become monsoon-proof over period of a time. In a doubt year, the production touched the 138-mt mark in 2023-24. The recent export ban was due to a shortfall in wheat production, not rice, and India currently has a large surplus of nearly 70 mt of rice stocks,” he said.
“With an expected production of 150 mt in 2024-25 and a domestic consumption of around 90 mt, the surplus is projected to grow to 40 mt by 2030,” he pointed out.
“This surplus signifies that rice is no longer just a food security crop for India but a potential cash crop for the export market. The current export strategy primarily focuses on low-priced, low-quality parboiled rice and raw rice to the African market,” he said.
He felt that India must shift its focus to exporting rice to premium markets such as the Phillippines and Indonesia.
Ironically, when India imposed a ban on its rice exports, the US was one of the major beneficiaries. According to BMI, a unit of Fitch Solutions, deals for 7.3 lakh tonnes of US rice were signed until March 2024 to Mexico compared with 2 lakh tonnes till March 2023. The US benefitted in terms of rise in the grain prices, too.
A trade analyst said the US is selling rice to Canada, Mexico, and other South America countries ar over $700 a tonne. India could gain based on demand-supply gap and prices too will depend on prevailing market situation.