Rice production has decreased massively across the world.
This is causing prices to rise and impacting over 3.5 billion people globally, particularly in Asia-Pacific, which consumes most of the world’s rice. Rice production in 2023 is set to log the biggest shortfall in two decades, according to reports by Fitch solutions.
According to Fitch Solutions commodity analyst Charles Hart, the most evident impact of the global rice deficit is the decade-high price of rice. The price will only decrease to $14.50 per cwt in 2024 from an average of $17.30 per cwt through 2023.Cwt is a measurement unit used for some goods, including rice.
“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,” said Hart.
The research predicted that there would be an 8.7 million tonnes global deficit in 2022–2023.
According to Hart, that would be the biggest global rice shortfall since the global rice markets produced a deficit of 18.6 million tonnes in 2003–2004.
Causes for the shortage:
Because of the ongoing conflict in Ukraine and the unfavourable weather in nations that produce rice, such China and Pakistan, there is a shortage of rice.
Large areas of cropland in China, the world's largest rice producer, were devastated by high summer monsoon rains and floods in the second part of last year.
According to the agriculture analytics firm Gro Intelligence, the total amount of rainfall in China's Guangxi and Guangdong provinces—two of the nation's biggest rice producing centers—was the second highest in at least 20 years.
Similar to Pakistan, which accounts for 7.6% of the world's rice trade, the U.S. Department of Agriculture (USDA) reported that Pakistan's yearly rice production fell 31% year-on-year as a result of severe flooding last year, calling the damage “even worse than initially expected.”
According to Oscar Tjakra, senior analyst at global food and agriculture bank Rabobank, lower year-on-year rice output in other nations, including the U.S. and EU, has also contributed to the imbalance.
“The current global rice production deficit situation will increase the cost of importing rice for major rice importers such as Indonesia, Philippines, Malaysia and African countries in 2023,” said Tjakra.
