India, the world's top rice exporter, just slapped a 20% tax on some rice exports. It could further fuel food inflation.

India, the world's top rice exporter, has imposed a 20% tax on some rice grades in a move that could make the food crisis worse.

India's finance ministry announced on Thursday that the new export tax will take effect on Friday. The government of India banned the export of 100% broken rice, which is used for animal feed, according to reports.

Rice planting in India has been impacted by a lack of rain this year, according to the news agencies.

According to the USDA, India accounts for 40% of global rice exports. The country's move to impose a 20% tax on some rice grades and restrict broken rice is expected to push up the price of rice.

According to the USDA, China and the Philippines are the top two suppliers of staple grain.

Rice prices were relatively stable as the prices of wheat and corn went up this year. Demand from India may be shifted to its competitors.

Rice shipments from India will be uncompetitive in the world market. The president of the India Rice Exporters Association said that buyers will move to Thailand and Vietnam. The world's second and third largest rice exporting countries are Southeast Asian.

Rice is the third major agricultural commodity in India to be affected by export restrictions. There is a wave of food protection.