- World rice production decreases, generating tension in market prices.
- More than 3.5 billion people around the world eat rice daily, especially in Asia-Pacific where 90% of the planet’s rice is consumed.
- The shortage is due to various causes such as the war in Ukraine and weather problems in producing countries such as China and Pakistan.
Rice production falls worldwide. From China to the United States, passing through the countries of the European Union, in all of them the amount that goes to the market is falling, generating a strong tension in prices.
It’s a problem? Of course. More than 3.5 billion people around the world eat rice every day. Especially in Asia-Pacific, where 90 percent of the planet’s rice is consumed.
Data for this Wednesday, April 19, Fitch Solutions confirm it: the world rice market will register its largest deficit in 20 years this 2023.
Charles Hart, a commodity analyst at Fitch Solutions, said in a note that the price is expected to remain at its highs until 2024.
The sale value of rice averages 17.35 dollars per quintal this 2023 and would only drop to 14.60 in 2024, according to the Fitch Solutions analysis.
As rice is the staple food in dozens of countries, especially in Asia, price is a key factor in food price inflation in those nations.
In addition, since these countries are the workforce for thousands of products of all kinds, Rising rice prices threaten to drive up the cost of manufacturing a wide spectrum of items, from technology to clothing to cars.
According to FS, the world deficit for 2023 would be 8.8 million tons. This would determine the largest global deficit of this product since 2003, when world markets had a shortage of 18 million tons.
Why is there no rice?
The rice shortage is the result of various causes, such as the war in Ukraine and weather problems in producing economies such as China and Pakistan.
Especially in the second half of 2022, large tracts of cultivated land in China, the largest rice producer, were affected by unseasonable rains that reduced the number of quintals per hectare.
Agricultural analysis firm Gro Intelligence said the amount of accumulated rainfall in Guangdong province, one of China’s main production hubs, was the second highest in two decades.
In Pakistan, which produces 8 percent of the world’s rice, the drop in production was 31 percent year-on-year due to the 2022 floods.
Production and consumption in the world
According to data from the Food and Agriculture Organization of the United Nations (FAO), China is the world’s largest producer, closely followed by India.
In 2020, China produced 149.6 million metric tons (MMT) of rice, while India produced 120.3 MMT.
These two countries alone account for more than half of the world’s total rice production, with China contributing around 29 percent and India 23 percent.
Besides Pakistan, other producing countries are Indonesia, Bangladesh and Vietnam.
When it comes to rice consumption, China and India are also the largest consumers. In 2020, China consumed 145.8 MMT of rice, while India scored 101.9 MMT.
In Latin America, several countries are major players in the production. Brazil, for example, is the largest producer in the region, with 10.7 MMT (2020 data).
Other important producing countries in Latin America are Argentina, Uruguay and Paraguay. Argentina produced 1.5 MMT in 2020, while Uruguay and Paraguay produced 1.3 MMT and 1.2 MMT, respectively.
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