SHAFAQNA TURKEY – Rice prices hit their highest level in two years as imports surged after the onset of El Niño in Asia.
Rice prices in Asia soared to their highest level in more than two years as importers piled up inventories as El Niño began, fearing that warm weather would dry out fields and damage crops.
5 percent broken Thai white rice, the region’s benchmark product, rose almost 15 percent in the past four months to $535, the highest level since early March 2021, according to data from the Thai Rice Exporters Association.
For the first time in seven years, El Niño conditions have emerged in the tropical Pacific Ocean, threatening to cause drought in Southeast Asia, according to the World Meteorological Organization. Three days of record global temperatures last week raised concerns about the pace of climate change.
While monsoon rains have eased rice fields in parts of India, the largest exporter, Thailand, the number 2 exporter, will face widespread drought from early 2024, which is seen as a major threat to crops.
The government has already asked farmers to harvest only one crop this year, limiting their crops.
Chukiat Ofaswongse, honorary president of the Thai Rice Exporters Association, said: “With El Niño, we will begin to clearly see the effects of dry weather in the upcoming September and October. However, we will see stockpiling continue as El Niño looks set to continue into next year.”
Shopping in Indonesia
On the import side, efforts have been made to build stocks at an aggressive pace. With increased shipments to buyers in the Philippines, China and Indonesia, Vietnam expects rice exports to hit its highest level in nearly a decade this year.
Jeremy Zwinger, founder and CEO of research firm The Rice Trader, said of prices: “Major acquisitions from Indonesia and the Philippines have pushed the market higher. “However, unless politics or the weather changes direction, the weakness will return in the new year or even in the fourth quarter.”
Zwinger noted that the world’s supply of rice is extremely large.
The China Meteorological Administration noted that heatwaves are likely to continue in many parts of southern China over the next few days, with parts of the main rice-producing provinces of Hunan and Jiangxi hitting 40°C. These regions were noted to be at “high risk” of heat causing some types of rice to ripen prematurely.
Bloomberg
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