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According to Reuters, due to the detrimental environmental impacts of prolonged warming in the Pacific Ocean known as El Niño, global rice prices are expected to rise drastically, about 10-20% by the end of this year.
Below-average rainfall, caused by El Niño’s weather pattern, disrupted Indian rice plantations, caused drought in 7 out of 67 rice-producing Thai provinces, and cut Vietnam’s rice output by a major number. Rice exports from these three countries accounted for 68% of global rice trade, or about 27.2 million tons. This figure is a decrease of 6.2% of last year, according to stats by the U.N. Food and Agriculture Organization (FAO).
Rising global demand for rice, with top producers being India, Thailand, Vietnam, Pakistan and the United States, caused a substantial depletion in stock when world trade rose to a record 42.8 million tonnes in 2014. With less than favorable agricultural conditions this year, supply is expected to dip much lower. The FAO estimates that global rice stock, relative to domestic consumption and exports, will drop 19% by 2015/2016. Meanwhile, current demand is expected to spike as buyers rush to stock up knowing that the supply is dipping a record low.
Amidst the bad news lies some hope. The Philippines, one of the world’s biggest rice importers, indicated last week that it can provide superfluous rice stock to meet global demand. However, this might not be adequate to stabilize global prices.
Currently, China and Nigeria are planning on increasing their rice imports; China wanting an additional 4 million tonnes and Nigeria wanting 3.7 million tonnes.
Hopefully, Mother Nature will be kinder as the months progress and helps change the current rice stock decline.