Prices for rice have spiked as a result of the Indian government’s decision to ban exports of many varieties of rice. Nikkei Asia reports:
International prices for rice and wheat have spiked to rare highs in recent weeks, driven by India’s ban on most rice exports and Russia’s ongoing war in Ukraine.
Bangkok rice traded at $607.50 a tonne on July 27, with the benchmark jumping by $62.50 in the week since India announced a ban on exports of non-basmati white rice July 20. Bangkok rice hit its highest price since May 2012.
India’s ministry of consumer affairs said it prohibited most rice exports to “lower the price as well as ensure availability in the domestic market.”
India led the world in rice exports for the 2022-23 growing season with 22.5 million tonnes, or 40% of the global total, the U.S. Department of Agriculture reports. Thailand ranked second, at 8.5 million tonnes.
El Nino conditions have returned for the first time in seven years, raising the risk of rice shortages. El Nino refers to the weather pattern in the equatorial region of the Pacific Ocean caused by higher sea surface temperatures. The effect could deplete rainfall in Southeast Asia, a major rice producing center.
Global rice inventories are expected to drop to 170.42 million tonnes at the end of the 2023-24 crop season, the lowest since the 2017-18 season, due to the anticipated decline in supply.
If future weather conditions prompt further downgrades to inventory projections, global rice prices could be pushed even higher as markets anticipate tighter supplies down the road.
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