With lumpy skin disease killing farmers' cattle by the thousands and El Niño causing weather chaos, Nepal could face food shortages or food price shocks, experts have warned.

Topping off the gloomy outlook, reports say that India may ban non-Basmati rice and wheat exports to keep its food reserve intact amid the threat of El Niño disruptions.

The El Niño climate event, which is caused by warmer surface waters in the Pacific Ocean, leads to increased risk of heavy rainfall and droughts in certain parts of the world.

Concerns over the return of the El Niño weather phenomenon have already driven benchmark prices to a two-year high, heightening fears of potential crop damage and exacerbating the upward trajectory of prices in the global rice market, reports said.

In Nepal, farmers are unable to transplant paddy because the lumpy skin disease has killed their oxen and they can't plough their fields.

Thousands of Nepali farmers across the country use cattle to plough their paddy fields, and the spread of the disease at the busiest time of the year has caused immense distress among them.

The disease has been expected to hit dairy output too. Experts have warned of a possible drop in the paddy harvest and dairy output which may trigger food insecurity this year.

They say that the country is already grappling with high inflation, and a decrease in agricultural production could hurt people in the low-income bracket.

“We have not received any information formally or informally from the Indian government about the possible export ban,” said Radhika Aryal, joint secretary of the Ministry of Industry, Commerce and Supplies.

“We will inform the concerned authorities about the issue and decide accordingly,” she said.

Rice is the staple of Nepali households. Nepalis eat rice in the morning and rice in the evening. Experts say a supply deficit of even 2-3 percent can send market prices soaring.

The Industry Ministry should take the issue seriously and request the Indian government to consider Nepal, a trade expert said.

In September 2022, India banned exports of broken rice and imposed a 20 percent duty on exports of various grades of rice as it sought to boost domestic supply and calm local prices after below-average monsoon rainfall curtailed planting.

The repercussions of the ban were felt immediately in Nepal as the retail price of imported rice increased by Rs150 to Rs200 per 20-kg bag.

According to Indian media reports, the Indian government is holding discussions concerning a plan to restrict the export of non-Basmati rice to mitigate the risk of heightened inflation ahead of the upcoming elections.

Nepal requires 4 million tonnes of rice annually to feed its population, and the deficit is made up by imports from India.

According to the Department of Customs, the year-on-year import of rice from India amounted to Rs14.72 billion in the first 11 months of the current fiscal year ended mid-June. The country imported 217,792 tonnes of rice, mostly from India.

As rumours of a ban on rice exports by India have started spreading, the Ministry of Industry, Commerce and Supplies needs to be more proactive, say experts, because Nepal may face the double whammy of lumpy skin disease and below-average monsoon rainfall that may slash output.

The government should do an assessment of rice production in Nepal and ask for the required quantity to avoid a food deficit and price spikes, said an official at South Asia Watch on Trade, Economics and Environment.

There are also high chances of unscrupulous traders raising the price of rice on the pretext of the export ban.

According to Nepal Rastra Bank, inflation in cereal grains and their products increased by 13.06 percent in mid-June compared to the same period of the last fiscal year.

Nepali farmers are expected to harvest 5.48 million tonnes of paddy this fiscal year, which is 7 percent more than last year. However, wheat output has been estimated to drop by 2 percent.