In August, world rice prices increased by 9.8% compared to the previous month, according to the Food and Agriculture Organization of the United Nations (FAO), Friday (8 September). This is the highest price in fifteen years, specifies the FAO.
The reason is not the drop in stocks: “Global rice stocks at the end of the 2023-2024 marketing years are still expected to reach their highest level on record” after an increase of 1.4% compared to 2022-2023, according to the agency. Nearly three-quarters of this volume should be held by China and India.
The cause of the increase is to be found in Indian domestic politics. On July 20, New Delhi banned the export of non-basmati white rice (about a quarter of its usual rice exports), in order to preserve enough of this product for consumption by its residents and to limit inflation in the market interior.
However, India accounts for 40% of the world rice trade and sells broken rice to Africa, particularly to Senegal, Nigeria, Côte d’Ivoire and Benin, as well as to Asia (Pakistan, Philippines ) and in the Middle East (Turkey, Syria). A 20% export tax on parboiled rice has also been implemented. The country would also consider a reduction in customs duties on wheat, in order to facilitate the importation of this cereal.
States tempted by the conservation of stocks
World rice prices were already at the end of July “up 30% year-on-year”had reminded Agence France-Presse, Patricio Mendez del Villar, rice specialist and economist at the Center for International Cooperation in Agricultural Research for Development.
While waiting for the new harvests, facing the “uncertainties as to the duration of the ban” decided by India and “fears that export restrictions will be extended to other types of rice”the global rice market has tightened, FAO said.
Many States and actors have chosen to “keep stocks”of “renegotiate contracts” or“stop making price offers”, explained the UN agency in a press release. To deal with the situation, the Philippines will sign an agreement with Vietnam to secure their rice imports for five years, declared the Vietnamese government on Thursday September 7.
World food prices as a whole fell slightly last month (−2.1% compared to July), driven down by the decline in the prices of cereals, vegetable oils, meat and dairy products.