Global rice prices surge close to 12-year highs, and could rise even more

Rice prices surged to their highest successful astir 12 years connected the backmost of India's atom export ban and adverse upwind conditions that could interaction production, said the United Nations' nutrient agency.

The Food and Agriculture Organization All Rice Price Index for July roseate by 2.8% to 129.7 points.

The fig is up 19.7% compared to a twelvemonth ago, and the highest nominal worth since September 2011, information from FAO showed. The sharpest increases successful terms came from Thailand.

"Concerns implicit the imaginable impacts of El Nino connected accumulation successful immoderate suppliers provided further underpinning to prices, arsenic did rain-induced interruptions and prime variability successful Vietnam's ongoing summer-autumn harvest," the study stated.

El Nino is a clime improvement marked by utmost temperatures and upwind conditions that could interrupt lives and livelihoods.

India, the world's starring atom exporter, banned exports of non-basmati achromatic rice connected Jul. 20, arsenic the authorities seeks to support a headdress connected soaring nutrient prices astatine home, and guarantee determination are capable supplies domestically "at tenable prices." 

The state accounts for much than 40% of the planetary atom trade. Even if it affects a information of India's wide atom shipments, FAO noted that India's export regularisation "raises important nutrient information concerns for a ample swathe of the satellite population."

Rice prices are hovering astatine decennary highs, with rough atom futures were past trading astatine $16.02 per hundredweight (cwt).

And these prices could ascent higher.

"We volition astir most apt spot a higher FAO atom terms scale for August 2023 vs July 2023," Oscar Tjakra, elder expert astatine planetary nutrient and agriculture slope Rabobank, told CNBC.

He added that India's non-basmati achromatic atom export prohibition came astatine a clip of seasonal debased inventories successful large planetary suppliers of rice, particularly those successful Asia.

Prices could surge further if different countries travel suit successful implementing export restrictions.

"The prices tin spell adjacent overmuch higher if importing countries effort to stockpile atom for home nutrient security, and exporting countries enactment export restrictions," said Samarendu Mohanty, Asian determination manager astatine International Potato Center.

El Nino could further exacerbate risks connected planetary accumulation successful different large Asian atom producers specified arsenic Thailand, Pakistan and Vietnam.

"For the adjacent fewer months, planetary atom prices' absorption volition beryllium determined by the interaction of El Nino," Tjakra said successful an email.

Rice, being a susceptible crop, has the highest probability of simultaneous harvest nonaccomplishment during an El Nino event, a technological study showed.

To marque matters worse, Thailand, the world's second largest exporter of rice, is present encouraging its farmers to works little of the harvest successful a bid to prevention h2o arsenic a effect of debased rainfall.