- Rice production in India, China, Bangladesh, Vietnam is under threat.
- Seasonal damage to rice crops comes close to record food prices.
- Rice prices have fallen this year even as wheat, soybeans are on the rise.
SINGAPORE/MUMBAI: Bad weather in Asia’s top rice-suppliers, including top exporter India, is slowing production of the world’s most important staple food crop and fueling food inflation that is already at record highs. is close to
Rice has supported a trend of rising food prices amid bumper crops and large exporter inventories over the past two years, even as COVID-19, supply disruptions and, more recently, the Russia-Ukraine conflict have weighed on other grains. It has become expensive.
But traders and analysts say bad weather among exporters in Asia, which accounts for about 90 percent of the world’s rice production, is likely to change prices.
“Rice prices are likely to increase with the possibility of reduced production in key exporting countries,” said National Australia Bank agribusiness expert Fin Zebel.
“Rice price increases will add to the already major challenges to food affordability in parts of the developing world,” Zebel told Reuters.
Heavy rains in India’s grain belt, a heat wave in China, floods in Bangladesh and a drop in quality in Vietnam could cut output, farmers, traders and analysts told Reuters. .
“Rice remains affordable even as overall food prices hit record levels earlier this year,” said Shirley Mustafa, an economist at the United Nations’ Food and Agriculture Organization.
Mustafa added, “We are now seeing weather-related setbacks in some of the major rice-producing countries, including India, China and Bangladesh, which could result in reduced production if conditions do not improve in the next few weeks. “
‘Production decline is certain’
India’s top rice-producing states of Bihar, Jharkhand, West Bengal and Uttar Pradesh have recorded a record 45 percent drop in monsoon rains so far this season, according to data from the state-run Meteorological Department. has been done
All India Rice Exporters Association president BV Krishna Rao said this has led to a 13 percent drop in rice cultivation this year, resulting in a 10 million tonne or about 8 percent drop in production from last year. may occur.
Rao said the area under rice cultivation is also low as some farmers have shifted to pulses and oilseeds.
India’s summer-sown rice accounts for more than 85 percent of its annual production, reaching a record 129.66 million tonnes in the crop year to June 2022.
“Production cuts are certain, but the big question is how the government will react,” said a Mumbai-based dealer at a global trading firm.
Milled and paddy rice stocks in India totaled 55 million tonnes as of July 1, against the target of 13.54 million tonnes.
It held down rice prices last year as well as India’s record shipment of 21.5 million tonnes in 2021, up from the total shipped by the world’s next four biggest exporters – Thailand, Vietnam, Pakistan and the US. It was more.
“But the government is very sensitive about prices. A slight increase may prompt it to impose restrictions on exports,” the trader said.
In Vietnam, rains during harvest have damaged grain quality.
“Never before have I seen so much rain during harvest. It’s just unusual,” said Tran Cong Dong, a 50-year-old farmer based in Bac Liu, Mekong Delta province.
“In just ten days, the total measured rainfall is roughly the same as last month,” said Dong, who estimated a 70 percent yield loss in his 2-hectare paddy field due to the flooding.
Imports, prices
China, the world’s largest rice consumer and importer, is facing production losses due to extreme heat in the grain-growing regions and imports are expected to reach a record 6 million tonnes in 2022/23, according to the US Department of Agriculture. is expected.
China imported 5.9 million tonnes a year ago.
Bangladesh, the world’s third-largest consumer, is also expected to import more rice after floods damaged its main production areas, traders said.
The full extent of the deficiencies in countries other than India has yet to be estimated by analysts or government agencies that often only publish year-end output data.
But the impact of unfriendly crop weather can already be seen this week in a slight increase in export prices from India and Thailand. RIC/AS
“Rice prices are already near the bottom and we see the market rising from current levels,” said a Singapore-based trader at one of the world’s largest rice traders.
“Demand is growing with other buyers in the Philippines and Africa looking to book cargo.”