The price of rice has seen sharp increase in recent months, reaching its highest level in nearly 12 years. The Food and Agriculture Organization of the United Nations (FAO) said that the FAO All Rice Price Index rose 2.8 per cent in July from a month ago, to an average of 129.7 points, Reuters reported. This is almost 20 per cent higher than the same time last year, and the highest level since September 2011.
There are a number of factors contributing to the rising price of rice such as strong demand for rice. Another factor is the recent move by India to curb exports, which has reduced the supply of rice on the global market. Moreover, erratic weather conditions in some rice-producing countries have also led to lower yields, which has further tightened the supply.
It is to be noted that India, which accounts for 40 per cent of world rice exports, last month ordered a halt to its largest rice export category to calm domestic prices, which climbed to multi-year highs in recent weeks.
In the current environment, these types of restrictions are likely to exacerbate volatility on food prices in the rest of the world. They could also lead to retaliatory measures, Pierre-Olivier Gourinchas, Chief Economist, IMF, told a press conference.
The rising price of rice is likely to have a significant impact on food security in many countries. Rice is a staple food for millions of people around the world, and the higher prices could make it more difficult for people to afford this essential food.
According to the report, India, Thailand, Vietnam, Cambodia and Pakistan are among leading exporters of rice. While, China, Philippines, Benin, Senegal, Nigeria and Malaysia are key importers of the staple.
The total exports of non-basmati white rice from India was USD 4.2 million in 2022-23 as against USD 2.62 million in the preceding year. Major destinations of India’s non-basmati white rice exports include the US, Thailand, Italy, Spain and Sri Lanka.
This article has been republished from The Business Today