Global Rice Market Stable Despite Persistent Weather Risks
Published on: May 7, 2024.
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Global rice supplies have stabilized after a previous rally, but the market still faces risks from El Nino-induced dry weather, according to a senior executive at commodity merchant Louis Dreyfus Co. Rice prices in key Asian export hubs have eased in recent weeks after reaching their highest levels since 2008 due to an export ban by India, the largest rice shipper in the world. The combination of India’s export ban and Indonesia’s increased demand contributed to the tight market and rising prices. However, supply and prices have now stabilized.
While the export ban in India disrupted the market, it also led to heightened food inflation pressure. The executive mentioned that rice supplies are still vulnerable to adverse weather, especially the El Nino phenomenon, which causes hot and dry weather in Asia. This climate pattern impacts rice growing regions and is a crucial factor to consider for the coming months’ production from irrigated crops.
The executive highlighted the unpredictability of weather events due to climate change and how challenging it has become for the trade to address these imbalances. This unpredictability led to lower rice demand from some countries during last year’s price rally. It is important to note that India’s rice often goes to Africa, which is a price-sensitive market. As prices go up, the market has effectively rationed demand.
Overall, while rice supplies have stabilized, the market remains vulnerable to weather risks. The coming months will provide more clarity on the production of irrigated crops, and it is essential to monitor the levels of reservoirs in key producing countries. Despite the challenges posed by climate change and export bans, the rice market continues to adapt and find solutions.
Source: [BRecorder](https://www.brecorder.com)
