Rice could keep Asia’s food inflation risks from getting worse
Published on: March 10, 2022.
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Russia’s invasion of Ukraine has delivered a global-scale disruption that is set to cascade through food supply chains and worsen hunger, but Asia’s love for rice could limit the fallout.
Rice is more popular with many Asian consumers than wheat, which has seen supplies cut off from one of the world’s breadbaskets, said Jules Hugot, an economist at the Asian Development Bank. Rice prices have been relatively stable, and it’s easy to swap one staple for the other, he said.
“These are sources of starch and there’s substitution between them,” Hugot said in an interview, though adding there’s spillover from the rally. Wheat has jumped to an all-time high, while rice is near the highest since May 2020.
Russia and Ukraine together account for a quarter of the global trade of wheat, used in everything from bread to noodles and livestock feed. The conflict shuttered ports in Ukraine while trade with Russia has been stifled by sanctions. The elevated prices are accelerating food inflation across the world and raising concerns for countries reliant on foreign supply.
