El Nino to raise the global rice prices
Global rice prices are to see a spike from 10% to 20% in the coming few months as an EL Nino weather pattern rack the top producers in Asia desiccating to the cropland and sabotaging the grain stock to a multi-year low. Though the high prices may be a bad news to the countries in Asia and Africa, lower output will however help the next level exporter Thailand offload its swelling stock that have weighed on the market stocks and have pushed the stock prices down the normal benchmark of 7-1/2 years low of $367.50 per tonne in June. The scarcity in the annual rainfall linked to El Nino has already succeeded in disrupting the rice plantation in India which also lead to a drought in the in seven out of sixty-seven Thai provinces during the wet season and also cut Vietnam’s output expectation. According to the UN Food and Agricultural organization, the world rice trade accounted for 68%, are seen at 27.2 million tonnes this year, down by 6.2% from a year ago. However, the expectation for the prices level is to grow, due to the present weather condition and also a strong El Nino, which would typically lead to the crop damaging due to the bad weather across Asia and East Africa. The FAO estimates the stock-to-use ratio, the world's top five rice exporting countries will drop to 19% in 2015-16, lowest since 2007-08. Rice stocks in India, Thailand, Vietnam, Pakistan and US were drawn down in 2014 when the world trade in rice rose to record of 42.8 million tonnes. According to International Grains Council estimates China's 2014-15 imports could rise 8% to 4 million tonnes, while overseas purchases by Nigeria could jump to 3.7 million tonnes, up 9% from last year.
July 30, 2015 | 8:37 pm IST.