Global rice shortage in 2023 to be largest in 20 years

Rice production in 2023 is going to be lowest in 20 years, according to analysts. The global shortage for rice for the year 2022-23 is estimated to be 8.7 million tonnes.

Currently, India is the leading exporter of rice in the world, thus accounting for over 40 percent of the global rice trade, as well as the second largest producer right after China.

Effective July 20, the Union government banned the export of non-basmati white rice owing to the continuous rise in prices in the past few months.

The Ministry of Consumer Affairs said that the ban would help ensure “adequate availability” of non-basmati white rice in the country, along with the aim to “allay the rise in prices in the domestic market.”

Eve Barre, ASEAN economist at trade credit insurer Coface said, “Global rice [supplies] would drastically tighten, since the country (India) is the world’s second top producer of the food staple.” He further added that countries like Bangladesh and Nepal would be hit the hardest by the ban, given they are top export destinations.

“Rice inflation has already accelerated from an average 6 percent year-on-year last year to nearly 12 percent in June 2023,” stated DBS Bank senior economist Radhika Rao.

The shortage of this commodity can be traced back to supply woes on Ukraine war, bad weather in China and Pakistan. According to a report by USDA, the rice crop in Pakistan has been estimated to be down 31 percent on a year-on-year basis.

Furthermore, prices in Asia are tending towards the higher side given it accounts for 90 percent of the worlds’ consumers.

Rice and pulses have further been on risk, with spatial and deficient monsoon in several states of the country. As of July 14, overall kharif sowing remains low registering a 2 percent fall, the reason for which has been attributed to low rains in West Bengal, a major producer of rice, and Maharashtra and Karnataka, which together account for over 50 percent of pulse production of the country.

This article has been republished from Moneycontrol