Asia’s Harsh Weather Threatens Rice Price Hike
Patchy rains in India’s grain belt, a heatwave in China, floods in Bangladesh and quality downgrades in Vietnam threaten rice output in four of the world’s top five producers and a price spike that may stoke food inflation that already is near record highs.
Bumper crops and large inventories held by major exporters had previously helped rice, the world’s most important food staple, avoid the trend of higher food prices in recent years, despite supply disruptions from Russia’s war in Ukraine that sent food inflation to record levels.
But the effects of adverse weather are now triggering concerns that rice prices may also shoot higher.
India’s top rice-producing states of Bihar, Jharkhand, West Bengal and Uttar Pradesh have recorded a monsoon rainfall deficit of as much as 45% so far this season, data from the state-run weather department shows.
That has in part led to a 13% drop in rice planting this year, which could result in production falling by 10 million tonnes or around 8% from last year. The area under rice cultivation is down also because some farmers shifted to pulses and oilseeds.
India’s summer-sown rice accounts for more than 85% of its annual production, which jumped to a record 129.66 million tonnes in the crop year to June 2022. Milled and paddy rice stocks in India as of July 1 totalled 55 million tonnes, versus the target of 13.54 million tonnes.
That has kept rice prices down in the past year together with India’s record 21.5 million tonnes shipment in 2021, which was more than the total shipped by the world’s next four biggest exporters – Thailand, Vietnam, Pakistan and the United States.
Meanwhile, rains during harvest have damaged grain quality in Vietnam. In just 10 days, the total measured rain is somewhat equal to the whole of the previous month.About Us:Founded in 2012 with a vision to provide clients with a service they can trust, Sirius Financial Consulting is an internationally reputed private wealth management firm headquartered in Japan. Offering a full range of financial services to clients based around the world, we deliver impartial guidance by leveraging our industry expertise and unique insight into markets and their opportunities.
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Published Tue, 09 Aug 2022 19:00:29 -0500