2023-09-15 08:05:30
Boosted by restrictions imposed by India, the price of rice has soared to a 15-year high. Producing and importing countries are struggling to adapt to the effects of climate change.
The price of rice, which soared to its highest level in 15 yearsprefigures the way in which the climate change will disrupt the global food supply, according to experts.
Rice prices jumped 9.8% in August, reversing declines in other commodities, the Food and Agriculture Organization of the United Nations (FAO) announced last week.
This is the announcement in July by India, which represents 40% of world rice exports, of a ban on sales of non-basmati rice abroad, which ignited the powder. New Delhi justified this measure by a surge in rice prices on its domestic market caused by geopolitics, the El Nino climate phenomenon and “extreme weather conditions”.
“I think the end of this year and especially the beginning of next year will be very, very difficult.”
This year should be the hottest ever by humanity and the impact of El Nino, a recurring climatic phenomenon of increasing temperatures, might further worsen the situation. Despite severe flooding in parts of northern India, this August was the hottest and driest on record in the country. Lmonsoon, which brings up to 80% of the country’s annual rainfallwas much lower than normal.
The restrictions imposed by India in July following an embargo, last September, on exports of another variety of rice, an essential food in certain regions of Africa. Until 8% of global rice exports for 2023/24 might now be taken off the marketaccording to an analysis by BMI, which is part of the Fitch rating agency.
Fears of drought
For now, the crisis has offered an opportunity to Thailand and Vietnamthe second and third largest exporters in the world, to increase their exports.
Nguyen Nhu Cuong, an official from the Vietnamese Ministry of Agriculture and Rural Development, welcomes an “exceptional harvest” and plans to increase plantings.
But the drought that accompanies El Nino in Africa and Asia might threaten crops, worries Elyssa Kaur Ludher, of the Southeast Asia climate change program at the ISEAS-Yusof Ishak Institute. “I think the end of this year and especially the beginning of next year will be very, very difficult,” she warns.
“Raggy weather is the new normal.”
El Nino is a natural weather phenomenon that occurs every three to seven years and generally lasts nine to twelve months. It should strengthen at the end of this year. Even before India’s restrictions, its effect was driving up rice export prices, according to BMI.
In Thailand, precipitation is currently 18% lower than forecast for the period, the Office of National Water Resources said in September. Late rains might still offset the deficit, but the agency says it is “concerned” regarding an El Nino-induced drought.
“A question of social stability”
The impact is rather on prices and on offer, notes Charles Hart, agricultural commodities analyst at Fitch Solutions. “We are not witnessing a period of rice shortage.” This situation is likely to drain stocks reconstituted following the covid pandemic and to encourage importers to obtain new agreements and impose limits locally.
THE Philippines, a major importer, have just signed an agreement with Vietnam to stabilize supply, a few days following announcing a price cap. But for poorer countries, high prices mean less food. “It is also a question of social stability, it is a political question” to which leaders must be attentive, notes Elyssa Kaur Ludher.
Climate change can lower productivitywith agricultural yields falling as temperatures rise, but it also increases the probability of extreme events like the 2022 floods in Pakistan. “Global grain export markets are relatively concentrated, so this type of extreme weather risk is concentrated in a few markets,” adds Charles Hart.
In Inde, authorities need to develop better warning systems and new seeding models, underlines Avantika Goswami, climate change researcher at the Center for Science and Environment. “Raggy weather is the new normal,” she warns.
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