Rice prices have soared to the highest level in almost 15 years due to export restrictions in India and unfavorable weather conditions in Southeast Asia, sparking concerns about global food supplies. The price of Thai white 5% broken rice, an Asian benchmark, has reached $648 per ton, the highest since October 2008, according to data from the Thai Rice Exporters Association.
The surge in rice prices follows India’s decision in late July to impose restrictions on non-basmati white rice exports in an effort to stabilize domestic prices, which had risen by over 30% since October 2022. However, this move has raised fears of inflation in the global food market, given that rice is a staple food for billions of people in Asia and Africa.
Another threat to rice supplies comes from Thailand, the world’s second-largest exporter, where authorities have been encouraging farmers to switch to crops that require less water due to the anticipation of drier conditions caused by the El Nino climate pattern. El Nino typically brings reduced rainfall to Southeast Asia and other regions, negatively impacting crop production.
Data from the 2015/2016 crop year shows that a previous El Nino event led to a 16% decrease in Thailand’s rice output and reduced rice acreage. This year, rainfall in the country’s rice-growing regions is running 23% lower than last year, although it remains close to the 10-year average, according to the Gro database.
Charoen Laothamatas, president of the Thai Rice Exporters Association, revealed that Thailand exported 4.8 million metric tons of rice in the first seven months of this year, with monthly exports ranging from 700,000 to 800,000 tons. This is significantly lower compared to last year’s total rice exports of 7.71 million tons.
“The world market is very turbulent because of speculation in every market, affecting countries that do not have stocks in hand,” said Laothamatas during a press briefing.
The disruption in the global rice market raises concerns about food security and inflationary pressures. Rice is a staple food in many countries, and any shortage or significant price increase could have a severe impact on millions of people who rely on it as a primary source of nutrition.
Efforts are being made to address the situation and stabilize rice prices. The International Monetary Fund (IMF) has encouraged India to lift its ban on rice exports, recognizing the risks it poses to global food markets. However, the situation remains uncertain, and the impact of export restrictions and adverse weather conditions on rice supplies is likely to persist in the coming months.
In conclusion, the global food market is facing disruptions as rice prices reach their highest levels in nearly 15 years due to export restrictions in India and dry weather conditions in Southeast Asia. The concerns over food supplies and potential inflationary pressures highlight the vulnerability of global food security and the need for measures to ensure stable and affordable access to essential commodities like rice.
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