Rice prices are climbing! This is a sign that food inflation shock has thrown millions into poverty and is still reverberating, even as the cost of wheat and other farm commodities has declined slightly.
Thai rice, a benchmark for Asia, has soared to the highest levels in almost two years. Strong demand lies at the heart of the rally, with some importers buying more of the grain to replace wheat after the war in Ukraine disrupted supplies.
Some consumers have also been stocking up ahead of festivals, while a strengthening Thai currency has also helped to push up dollar-denominated prices.
Rice is a staple for half the world, and while wheat soared to a record in March last year, rice was relatively subdued for most of 2022, constraining food inflation in Asia. Costlier rice now will be unwelcome news for billions of people from China to India and Vietnam.
The United Nations has flagged the rise in rice prices as a risk, saying it is important to stay vigilant on food security.
Thailand, the second-biggest rice shipper, has seen strong demand from Iraq and Indonesia, according to Mr. Chookiat Ophaswongse, Honorary President of the Thai Rice Exporters Association. “Iraq has been diligently buying our rice every month,” he said. The Middle Eastern country was the single largest buyer last year.
“But as Thai rice prices get more expensive, new orders have started to slow. Buyers in China and Malaysia are switching to cheaper options, and prices may start easing around March when the new crop hits the market,” said Mr. Ophaswongse. “Even then, the Thai price would be higher than that of a similar Vietnamese grade.”
The Thai benchmark was last quoted at US$523 (S$688) a tonne, the highest since March 2021. Vietnamese prices were more than 10 per cent cheaper at about US$458 to US$462. The association cut its forecast for Thailand’s rice exports this year to 7.5 million tonnes from 8 million tonnes. Shipments reached 7.7 million tonnes in 2022, the highest in four years, according to preliminary data.
EDITOR’S TAKE:
We don’t often think of rice in the U.S., despite the fact that it is grown in several states like Arkansas, Texas, California and others. It is one of those commodities that simply is not as mainstream for our farmers as say corn, soybeans or wheat. Nevertheless, rice is important to those who grow and process it here in this country and around the world. Plus, as this article alludes to, rice is a staple in the diets of nearly half of the global population. Increased prices for rice help our producers and processors, but at the same time it is deeply concerning for many consumers. Inflation, even if slowing a bit, is still a major factor for many consumers in the U.S. and other countries.
Rice producers, on the other hand, should have a very good year! If you have rice producers in your area, be sure to reach out to them with your service specials. Make certain when they stop by your dealership to show them around. Point out the advantages of AgPack® for purchasing or leasing a new or qualified used truck from you, a CAD member! It all starts with a simple question – “Are you a farmer?”
