Rice prices in Asia started to cool down as importers sought to build up domestic stocks amid persistent concerns about global supply.
Rice prices in Asia began falling after reaching the highest level in nearly 15 years in the second week of August as major importers sought to build up domestic stocks amid persistent concerns about global supply.
Thailand’s 5 % broken white rice – the Asian standard – fell to 612 USD per ton on Aug. 16, according to the Thai Rice Exporters Association. Prices are still up 20% this year after reaching the highest level since 2008 last week. The Philippines, the second-largest rice importer, is negotiating to deliver rice from Vietnam and India to boost their stocks and lower prices Meanwhile, Indonesia is speeding up domestic shipments to build up stocks.
Rice prices in Asia started to cool down.
Rice is important for the diet of nearly half the world’s population, especially in Asia and Africa. Concerns about supply escalated after India banned some export items and Thailand urged farmers to switch to less water-intensive crops as the country struggled with drier weather conditions. These countries are the world’s two largest rice exporters. The beginning of the El Niño phenomenon also threatens global production.
Data from the General Department of Customs show that Vietnam’s rice exports to Indonesia increased by about 1,500% in the first 7 months of 2023 compared to the same period last year. The number of shipments to China is also higher, while shipments to the Philippines are slightly lower. Manila’s purchases, however, were up in July compared to June. At its peak, the highest price of rice in 15 years, Thai 5% broken white rice, increased to $648/ton, the most expensive since October 2008.
Rising prices can cause more inflationary pressures and increase import invoices for buyers. The latest threat to supply comes from Thailand, the second-largest exporter. Authorities are encouraging farmers to switch to less water-intensive crops as the country is going to face drier weather caused by El Niño.
Cumulative rainfall in the main central cropping area is 40% lower than normal and the move to limit cropping is to save water for households. The Thai government had previously asked growers to harvest only one crop this year.
In late July, India expanded its ban on rice exports to protect domestic supplies, boosting purchases in several countries. Restrictive measures caused more concerns about global shortages amid growing world consumption. Rising prices will make tensions more serious in the global food market, which has been impacted by severe weather and reduced grain supplies from the Black Sea region due to the conflict in Ukraine./.