Expectations of a global increase in rice prices
Three traders said that rice trade in Asia stopped Friday to accommodate the ban imposed yesterday by India, the world’s largest supplier, on a large share of its rice exports, with prices expected to rise significantly in the coming days.
India, whose shipments account for 40 percent of global rice exports, announced the decision Thursday to lower domestic prices, which in recent weeks have risen to multi-year highs as volatile weather threatens production.
“Rice prices will rise further in the export market. We expect the minimum increase to be around $50 per tonne and could reach $100 or more,” said a Singapore-based trader from an international company.
“At the moment everyone, buyers and sellers, is waiting to see how far the price will go in the market,” he added.
Two other traders, one in Singapore and the other in Bangkok, said they expected a similar price increase. The two traders declined to give their names because they are not authorized to speak to the media.
The second Singaporean trader said, “We did not hear of any trade today, but buyers will have to pay higher prices to obtain shipments because India’s decision deprived the market of large quantities.”
India’s decision to ban rice exports coincides with significant increases in the global wheat market, which renewed fears of rising food prices.
Global wheat prices jumped more than 10% this week, the biggest weekly increase in more than 16 months, as Russian attacks on Ukrainian ports raised concerns about global supplies.
Rice is a staple food for more than 3 billion people. Asia produces nearly 90% of the water-hungry crops.
The dry weather pattern associated with El Niño is likely to reduce supplies.