Rice prices could rise over fears of food security

Concerns are starting to rise in Asia whether there will be enough food for everyone, especially when it comes to rice, which is the predominant resource for billions of people around the region. India is the largest supplier with large warehouses overflowing with rice and wheat on record harvests, proving that there is definitely no lack of supply.

Thailand is the second-largest shipper and has recently reported that it has enough rice to meet its export demands. Although, the price of Thai white rice has depreciated by 5% due to the worst droughts the country has seen in decades and increased demands from importers.

Yesterday the Asian export benchmark has risen more than 25% to US$564 a ton, which is the highest it’s been since 2013.

United Nations Food and Agriculture Organisation, David Dawe says that the countries are just operating out of an abundance of caution, they just want to make sure that they have enough supplies for themselves. Importers are also not taking any chances.”

“In the short term, rice prices will go up, but they won’t go up a lot.”

“I don’t think we’re going to see a price spike as we saw in 2008 where benchmark prices climbed to more than US$ 1,000 a tonne as nations curbed exports amid a global food shortage.”

China and India are the largest global producers and consumers of rice. In China alone, there are around 1.4 billion mouths to feed, due to this China has pledged to buy an exceeding amount from this year’s harvest to ensure supplies.

Vietnam is the world’s third-largest shipper and has temporarily suspended all new export sales to protect domestic supplies throughout the drought in the Mekong Delta. The Vietnamese PM has asked the trade ministry to submit an export plan before April 5, as shipments need to be controlled in order to ensure national food security. Myanmar has also said it may cut exports to avoid domestic shortages.

SOURCE: The Nation

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