Stuttgart (KATV) — Arkansas rice farmers are closely watching what’s happening in India, which is the world’s #1 exporter of rice, but last month the country cut three-quarters of its overseas shipments to calm rising domestic prices.
The natural state is the country’s top rice producer.
Kevin McGilton of Riceland Mills said that anytime rice is impacted on a global scale, it’s bound to affect Arkansas farmers.
“Anything that happens globally is going to find its way back to Arkansas, so the export ban in India will effect prices here,” McGilton said.
According to McGilton, the World rice trade is 55 million metric tons, and India exports 22 million metric tons. The United States exports around 2 million metric tons on a milled rice basis and Arkansas would supply roughly half of that crop.
McGilton said his concern is what will happen once India rejoins the market.
“When India decides okay, now we’re going to begin, now you may see a whipsaw, you may see prices move lower just as quickly as they moved higher, they can mover lower when India starts dumping race back on the world market,” he said.
McGilton said the crisis in India, for now, won’t impact the rice supply in the country.
Chris Isbell of Isbell Farms said export prices were crazy in 2008. He said what’s going on in India is not the same scenario that happened 15 years ago.
“It’s unfortunate that somebody’s misfortune turns into our price increase,” Isbell said. “Maybe this time next year, it will be us having a misfortune, then somebody else having a price increase from it.”
Isbell said he’s not sure what impact export prices will have on his farm until next year.
“Hopefully, we will be able to add a little bit of extra money to our bank accounts, to offset some of those things,” he said.
McGilton said they always look over rice prices and ways to manage price risk for croppers.