Posted on April, 20, 2023 at 12:46 am
The global shortage of rice, one of the most consumed food grains in the world, is set to be the largest in the last two decades, according to New York-based research firm Fitch Solutions. The Fitch Solutions Country Risk and Industry Research report forecasts the global shortfall at 8.7 million tonnes in 2022-23, which is the highest since the deficit of 18.6 million recorded in 2003-04. The shortage will shore up the prices in most parts of the world, and end up adversely affecting an estimated 3.5 billion people across the globe, Fitch Solutions analysts said. Global markets have already begun feeling the pinch, with the price averaging at $17.30 per cwt (hundredweight) throughout 2023 so far, and is expected to relatively slow down to $14.50 per cwt only next year, the report said. “Given that rice is the staple food commodity across multiple markets in Asia, prices are a major determinant of food price inflation and food security, particularly for the poorest households," Charles Hart, Commodities Analyst, Fitch Solutions told CNBC. The shortage is driven by an array of factors, including the strained supplies due to the Russia-Ukraine war, the intense heat and drought last year in China which deteriorated a significant portion of the country's harvest, and the floods in Pakistan in the past year's monsoon which caused total crop loss in vast swathes of the country. India's decision to ban the export of broken rice in September last year is also one of the factors that have driven up global prices, Hart claimed. "The global rice export market, which is typically tighter than that of the other major grains ... has been affected by India’s export restriction," the analyst was quoted as saying. Fitch Solutions, however, expects the global rice market to return to "an almost balanced position in 2023/24", and record a "surplus" in 2024/25. “It is our view that global rice production will stage a solid rebound in 2023/24, expecting total output to rise by 2.5 percent year-on-year,” Fitch’s report said, adding that India remains a “principal engine” of the rice output in the international market in the next five years.
Source: Money Control