ALBAWABA - Rice prices in Asia have jumped to their highest levels in 15 years, driven by increasing concerns about global staple food supplies. These worries are particularly pronounced due to threats from dry weather impacting production in Thailand and India's ban on certain rice exports.
Thai white rice (5% broken), an Asian benchmark, rose to $648 per ton according to data from the Thai Rice Exporters Association on Wednesday. With this surge, prices have increased nearly 50% over the past year, as reported by Bloomberg.
Rice is a vital component of meals for billions of people in Asia and Africa, and rising prices could lead to increased inflationary pressures and higher import bills for buyers.
The latest supply threat comes from Thailand, the world's second-largest rice exporter, where the government is encouraging farmers to shift to crops requiring less water, as the country prepares for drier climatic conditions associated with the El Niño phenomenon. Cumulative rainfall in the main central growth area has fallen 40% below the normal average, prompting reduced cultivation to conserve water for households. The government had previously asked farmers to harvest only one crop this year.
On the other hand, India widened its export ban in July to safeguard domestic supplies, triggering panic-driven purchases and hoarding in some countries. The restrictions exacerbated global scarcity concerns amidst rising consumption.
Non-basmati white rice exports from India represent more than half of the country's exportable rice volume. India produces over 40% of the global exports of this commodity. Recent data from the United States Department of Agriculture indicates that rice consumption during 2022-2023 surged to 517 million tons, up from around 461 million tons in 2021-2022.
The data also highlighted India as the largest rice source to the world, with 22.5 million tons, followed by Thailand at 8.5 million tons, Vietnam at 7.5 million tons, Pakistan at 6.3 million tons, and the United States at 2.1 million tons.
Rising prices exacerbate pressures on global food markets already strained by harsh weather and decreased grain supplies from the Black Sea region due to the Russian-Ukrainian conflict.
