In August last, India received 16 percent less rainfall than normal. This has created fears of disruption to paddy production as well as pressure on the supply of exportable rice. In the country, prices of parboiled, white and atap rice have risen to their highest level in a year. The price of 5 percent broken parboiled rice has risen to $377 per ton.
Economy
Asia's rice market may be unstable amid drought and water crisis
According to information from the International Rice Research Institute, nearly 40 percent of global rice exports come from India. The country exports an average of 16 million to 22 million tons of rice per year. Thailand and Vietnam also export about 7-8.7 million and 7-8 million tons of rice per year.
The US Department of Agriculture has forecast that rice production in Thailand may fall by about 400,000 tons or 2 percent in the next marketing year due to the water crisis and El Niño. As water levels in the four main reservoirs of the Chao Phraya River basin have decreased, off-season paddy cultivation is also having to be reduced.
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Meanwhile, although it is a large producer, Indonesia has to import 2 million to 4 million tons of rice every year to meet domestic demand. As a result, if supplies from India and Thailand decline, import-dependent markets like it could come under additional pressure. However, in Vietnam, the price of 5 percent broken rice is currently relatively stable at $440-445 per ton.
According to analysts, if the crisis in Asia's major producing countries is prolonged due to climate change, it could have a negative impact on regional food security.