"Rice Prices to Rise Again This Year"… Indian General Election and El Ni?o 'Adding Insult to Injury'

World Bank: "Rice Prices Remain High This Year Due to Export Controls and El Ni?o"

There are projections that global rice prices will rise further this year. This is because India is expected to continue its rice export controls until the general elections in April-May, and concerns over deteriorating global rice crop conditions are likely to increase demand.

[Image source=Yonhap News]

According to Bloomberg on the 9th (local time), the benchmark for Asian rice prices, Thai white rice (with a 5% broken grain content), reached $659 per ton at the end of last year, marking the highest level in 15 years. Peter Klob, a commodity market analyst at the International Grains Council based in London, UK, said, "We know that the rice market will remain tight (in terms of supply and demand) in the near future due to India's rice export ban," and predicted, "Rice demand may increase further ahead of the April Eid."

Muslims celebrate 'Eid al-Fitr' for three days to mark the end of fasting after Ramadan. Before Eid, rice demand tends to increase significantly in markets with large Muslim populations in Asia and Africa.

On the other hand, rice supply is limited. India, the world's largest rice supplier, is expected to maintain the rice export control measures introduced in July last year until the general elections in April-May. Indian Prime Minister Narendra Modi is focusing on controlling food prices as a key task to appease public sentiment ahead of the elections. Additionally, abnormal weather phenomena such as El Ni?o (a rise in sea surface temperatures near the equator) have caused frequent heavy rains and droughts, raising concerns about further deterioration of rice crop conditions and a decrease in rice supply.

Accordingly, forecasts that rice prices will continue to rise for the time being this year are gaining strength. Asian and African countries are already making strenuous efforts to secure rice supplies due to these concerns. Indonesia has even deployed the military to support increasing rice production among farmers.

Joseph Glauber, a senior researcher at the International Food Policy Research Institute (IFPRI), said, "Because there are not many suppliers, the rice market is currently in a very difficult situation," adding, "India's export control policy has created a significant gap in rice supply."

The World Bank (WB) predicted, "If India continues its export controls and a significant El Ni?o occurs, rice prices will remain high in 2024."

This content was produced with the assistance of AI translation services.