INDIA — Rice prices which rose 1% in the October cereal price index by the Food and Agricultural Organization of the United Nations (FAO) may rise even further in subsequent months as crops in Thailand and India are impacted by adverse weather conditions.
According a Global Agricultural Information report from the US Department of Agriculture’s Foreign Agricultural Service (FAS), unseasonal rains in October are water logging the India’s crop as it nears harvest.
The impact of this, according to FAS, is a 6% year on year drop in rice production to 122 million tonnes in marketing year 2022-23.
With the low crop FAS now expects the domestic rice prices which had eased somewhat in September following the Indian government imposing export control measures to strengthen in 2022-23.
“The expected lower rice harvest, along with continued strong export demand for white, milled rice, combined with the government MSP procurement of un-milled rice paddy will drive rice prices upward,” FAS said.
India is the world’s second-largest rice producer, behind China, and is the leading exporter most years. A rise in local prices is therefore expected to reverberate in markets globally.
Thailand’s rice crop hurt by flooding
Thailand, which is also a major exporter of rice is also experiencing floods that are damaging Flood the 2022-23 rice production, mostly in the country’s northeast, a report from the FAS has indicated.
The Ministry of Agriculture and Cooperative reported that Typhoon Noru, which hit Thailand on Sept. 29, caused widespread floods in the Chao Phraya, Chi and Mun river basins, damaging 84,998 hectares of main-crop rice, especially in the northeastern region.
The flood-damaged areas accounted for about 18% of total rice acreage. Floods had minimal impact on rice production in the Chao Phraya River basin as farmers already had completed their rice harvest.
FAS said the floods likely will delay the harvest of fragrant rice until the end of October or early November and has as a result revised down slightly the country’s output to 19.9 million tonnes from 20 million tonnes.
Thai rice exports benefited from the competitive rice prices following further weakening of the Thai baht against the US dollar and growing foreign demand. Thai rice exporters still face challenges through 2022 from high freight costs.