Latest reports suggest that adverse weather across top rice suppliers in Asia, including the biggest exporter India, is threatening to reduce the output of the world’s most important food staple and increase food inflation.
According to the reports, Rice has bucked the trend of rising food prices amid bumper crops and large inventories at exporters over the past two years, even as COVID-19, supply disruptions and more recently the Russia-Ukraine conflict made other grains costlier.
However, unfriendly weather in exporting countries in Asia, which accounts for about 90% of the world’s rice output, is likely to change the price trajectory, traders and analysts said.
In his reaction, Phin Ziebell, an agribusiness economist at National Australia Bank, said that there is upside potential for rice prices with the possibility of production downgrades in key exporting countries.
“An increase in rice prices would add to already major challenges for food affordability in parts of the developing world,” Ziebell was quoted as saying.
Farmers, traders and analysts are of the view that a combination of heatwaves in China, floods in Bangladesh, quality downgrades in Vietnam and Patchy rains in India’s grain belt could curb yields in four of the world’s top five rice producers.
U.N.’s Food and Agriculture Organisation economist, Shirley Mustafa, said that Rice has remained accessible even as overall food prices reached record levels earlier this year.
“We are now witnessing weather-related setbacks in some key rice-producing countries, including India, China and Bangladesh, which could result in lower output if conditions don’t improve in the next few weeks,” Mustafa said.
Story was adapted from US News.