MUMBAI: Adverse weather across top rice suppliers in Asia, including the biggest exporter India, is threatening to reduce the output of the world’s most important food staple and stoke food inflation that is already near record highs.
Rice has bucked the trend of rising food prices amid bumper crops and large inventories at exporters over the past two years, even as Covid-19, supply disruptions and more recently the Russia-Ukraine conflict made other grains costlier.
But inclement weather in exporting countries in Asia, which accounts for about 90 per cent of the world’s rice output, is likely to change the price trajectory, traders and analysts said.
Patchy rains in India’s grain belt, a heatwave in China, floods in Bangladesh and quality downgrades in Vietnam could curb yields in four of the world’s top five rice producers, farmers, traders and analysts said.
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 per cent so far this season, data from the state-run weather department shows.
That has in part led to a 13pc drop in rice planting this year, which could result in production falling by 10 million tonnes or around 8pc from last year, said B V Krishna Rao, president of the All India Rice Exporters Association.
The area under rice cultivation is down also because some farmers shifted to pulses and oilseeds, Rao said.
India’s summer-sown rice accounts for more than 85pc of its annual production, which jumped to a record 129.66m tonnes in the crop year to June 2022.
Milled and paddy rice stocks in India as of July 1 totalled 55m tonnes, versus the target of 13.54m tonnes.
That has kept rice prices down in the past year together with India’s record 21.5m tonnes shipment in 2021, which was more than the total shipped by the world’s next four biggest exporters – Thailand, Vietnam, Pakistan and the US.
In Vietnam, rains during harvest have damaged grain quality.
“Never before have I seen it rain that much during harvest. It’s just abnormal,” said Tran Cong Dang, a farmer based in the Mekong Delta province of Bac Lieu.
“In just 10 days, the total measured rain is somewhat equal to the whole of previous month,” said Dang, who estimated a 70pc output loss on his two-hectare paddy field due to floods.
China, the world’s biggest rice consumer and importer, has suffered yield losses from extreme heat in grain growing areas and is expected to lift imports to a record 6m tonnes in 2022/23, according to the US Department of Agriculture.
China imported 5.9m tonnes a year ago.
The world’s third-biggest consumer, Bangladesh, is also expected to import more rice following flood-damage in its main producing regions, traders said.
The full extent of shortfalls in countries other than India has yet to be estimated by analysts or government agencies that often only publish output data later in the year.