Following India's rice export ban and increased demand from China due to heavy rain damage, international rice prices are expected to continue rising.
On the 13th (local time), according to the US economic media CNBC, Fitch Ratings, one of the world's top three credit rating agencies, stated in a recent report that "a sharp rise in global rice prices is inevitable due to the heavy rain damage that struck China, the world's largest rice producer."
Fitch analyzed in the report that "heavy rains continue in the Northeast grain belt of China, including Heilongjiang, Jilin, Liaoning provinces, and Inner Mongolia, which account for 25% of China's total grain production. The increase in China's rice import demand due to harvest losses caused by flooding will push rice prices higher."
This year, extreme weather such as heatwaves and heavy rains have struck rice-growing areas worldwide, causing rice prices to soar to record highs. According to the United Nations Food and Agriculture Organization (FAO), the rice price index in July rose 2.8% from the previous month to 129.7 points. This represents nearly a 20% increase compared to the previous year, marking the highest level in 12 years since September 2011.
India, which accounts for 40% of global rice production, also influenced the rise in rice prices by banning rice exports. Last month, as grain crop conditions worsened due to a heatwave, India banned the export of all rice varieties except for the Basmati (long-grain rice) variety to secure domestic grain supply. The FAO forecasted that "India's export restrictions will pose a serious threat to global food security."
There are also forecasts that international rice prices will rise further. Oscar Chakra, chief analyst at Global Food Labobank, analyzed that "the rice price index will continue its upward trend compared to the previous month this month."
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