Rice Expensiveness Also Warned

Food prices have been on the rise in recent months. And rice, a major food in much of Asia, may be next, industry observers said.

The prices of many foods, ranging from wheat and cereals to meat and oil, have increased. This has been driven by a host of factors, including increasing the cost of waste and energy in the past year, as well as the Russia-Ukraine war.

The bans on food exports or serious disruptions have included those from India (grur), Ukraine (goury, oats, and sugar, among other things), and Indonesia (the palm tree's oil).

The rice could be next. The Food Awards Index of the United Nations Food and Agriculture Organization already shows that international rice prices are rising for the fifth consecutive month to reach the highest level in 12 months, according to the latest May data published last week.

To be sure, rice production is still abundant, experts said. But the increase in wheat prices, and generally higher agricultural costs, will make rice prices valid for monitoring later.

“We must monitor the price of the following rice, because the increase in wheat prices could lead to a replacement of rice, increased demand and reduced existing stock,” said Soal Varma, chief economist at the Japanese bank Nomura.

The Danger of Protectionism

The protectionist measures “actually exacerbate price pressures at the global level for various reasons”, she told “CNBC Street Sins Asia” Food and waste costs for agriculture are already rising and energy prices are increasing cargo transport costs, she added.

So there is the danger that we will see more protectionism from the countries,” said Varma.

However, she claimed that the risks to rice are still low as global rice inventorys are abundant, and crops in India are expected to be good this summer.

Russia's fight against Ukraine has increased grain prices. The two countries are the main exporters of wheat, and Russia's invasion has cut off agriculture and blocked grain exports from the country. The grain prices have increased more than 50% since a year ago.

Thailand and Vietnam were in talks on an agreement to raise the price of their rice exports, according to a Reuters report quoting a Thai government official in late May.

Four exporters told Reuters that rice traders have bought more Indian rice in the past two weeks, according to a June 6th report.

For now, I'm going to worry a lot more about India stopping rice exports in the coming weeks, as they were thinking about wheat and sugar,” told CNBC David Labande, senior researcher at the International Institute of Food Policy Research.

India and China are the world's two leading rice producers, making up more than half of the global total, according to the World Economic Forum. Vietnam is the fifth largest, and Thailand is in sixth place.

India imposed grain export bans in May, citing the need “to manage the country's overall food safety”. It also imposed limits on sugar just days after the grain ban. / Scan Tv/ Albinfo. ch