Rice Prices Soar as Climate Change Threatens Global Food Supplies: Experts Warn

The price of rice, at its highest level in 15 years following India’s restrictions on exports, previews how climate change will disrupt global food supplies, experts warn. Rice prices rose 9.8% in August, canceling out the declines in other basic products, the Food and Agriculture Organization of the United Nations (FAO) announced last week.

The process began with the announcement in July by India, which represents 40% of global rice exports, of a ban on sales of non-basmati rice abroad. India justified this measure by the sharp rise in rice prices in its domestic market caused by geopolitics, the El Niño climate phenomenon and “extreme weather conditions.”

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This year should be the hottest ever experienced by humanity and the impact of El Niño could even aggravate the situation. Despite heavy flooding in some northern areas, this August was the hottest and driest ever recorded in India. The rainy season, which provides up to 80% of the country’s annual rainfall, was significantly below normal.

The restrictions decided by India come after an embargo, last September, on exports of another variety of rice, an essential food in certain regions of Africa. Up to 8% of global rice exports for 2023/24 could now be withdrawn from the market, according to analysis by BMI, which is owned by ratings agency Fitch.

For now, the crisis gave an opportunity to Thailand and Vietnam, the second and third largest exporters in the world, to increase their shipments. The drought brought on by El Niño could threaten crops, says Elyssa Kaur Ludher of the Southeast Asia climate change program at the ISEAS-Yusof Ishak Institute.

“The end of this year and especially the beginning of next will be very, very difficult,” he warns. El Niño, a natural weather phenomenon, generally lasts 9 to 12 months and should strengthen at the end of this year. Before the restrictions imposed by India, their effect was driving up rice export prices, according to BMI.

In Thailand, rainfall is currently 18% below forecasts for the period, the National Water Resources Office said in September. Late rains could still compensate for the deficit, but the agency was “concerned” about the drought caused by El Niño.

The impact is more on prices than supply, says Charles Hart, agricultural commodities analyst at Fitch Solutions. “We are not in a period of rice shortage.” This situation may lead to reducing the reserves increased after the covid pandemic and prompt importers to obtain new agreements and impose limits at the local level.

The Philippines, a large importer, has just signed an agreement with Vietnam to stabilize supply, a few days after announcing price limits. Indonesia has increased imports from neighboring countries since the beginning of the year to stabilize the price of rice for its population.

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“We want to reinforce our strategic rice reserves, but now imports are complicated, which was not the case before,” stressed Indonesian President Joko Widodo. But for the poorest, high prices mean less food. “It is also a matter of social stability, a political matter” to which leaders must be attentive, emphasizes Elyssa Kaur Ludher.

Climate change may lower productivity, with agricultural yields declining as temperatures rise, but it also increases the likelihood of extreme events such as the 2022 floods in Pakistan. “Irregular weather conditions are the new normal,” emphasizes Avantika Goswami, a climate change researcher at the Center for Science and Environment.

Fuente: AFP.

2023-09-16 22:13:01
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