Analysts warn of global rice shortage due to extreme weather and Ukraine war

Analysts warn of global rice shortage due to extreme weather and Ukraine war

Karen Faulkner

Analysts have warned of a global rice shortage as extreme weather conditions have hit major rice-producing countries like China and Pakistan, and the Russian invasion of Ukraine has led to supplies of relatively cheap Ukrainian grain being blocked in Black Sea ports.

The convergence of events has driven up the price of rice worldwide, severely impacting around 3.5 billion people in the Asia-Pacific region for whom rice is an essential food.

The US-based Fitch Solutions Country Risk & Industry Research group has published a report forecasting that the price of rice will remain high until next year, CNBC reports. The price of rice averaged $17.30 per cwt through 2023 year-to-date and will only fall $14.50 per cwt in 2024, the Fitch Solutions report said. According to Fitch Solutions, the global rice market is poised to suffer its largest shortfall in two decades in 2023.

“At the global level, the most evident impact of the global rice deficit has been, and still is, decade-high rice prices,” Fitch Solutions’ commodities analyst Charles Hart explained in an interview with CNBC.

“Given that rice is the staple food commodity across multiple markets in Asia, prices are a major determinant of food price inflation and food security, particularly for the poorest households,” Hart said.