A Rice Shortage Is Set To Hit The World In 20 Years

A Rice Shortage Is Set To Hit The World In 20 Years

A price increase in rice should not negatively impact India’s economy. The world’s two biggest rice producers, China and Pakistan, have suffered from poor weather, and the Ukraine war is behind the development.

Due to China’s ongoing food shortage, Rice bran has been promoted as the country’s staple food since February, as needs have plagued the Chinese people since 2020.

As a notification published on the official website of China’s National Health Commission on January 19, developing the rice bran industry is essential to improving food security and nutrition for its people and reducing food loss.

To encourage the full use of byproducts, the Ministry of Agriculture and Rural Affairs created the National Rural Industry Development Plan (2020-2025). Rice bran (Oryza sativa) is obtained from the outside layer of rice.

Animals are primarily fed oil, which is extracted from it for oil extraction. Besides global warming, the loss of agriculturally productive land in China is another important factor contributing to the food crisis.

China has the fifth largest population on earth. On the other hand, only 11 per cent of the country’s land is ideal for farming. There has also been chaos due to the conflict between Russia and Ukraine.

COVID has aggravated a severe food shortage. A shortage of arid land in China has resulted in lop-sided industrialization. Meanwhile, flooding in Pakistan has reduced rice production by 31 per cent compared to last year. USDA states that the situation is worse than expected.

How Will India Be Affected?

In September, India banned broken rice exports as one of the world’s largest rice exporters. The Indian government also imposed a 20 per cent duty on certain other types of rice.

Rice exports by Thailand, Vietnam, Pakistan and the United States are all less than that amount. Balajee of Rice Industries said he does not foresee a problem, and costs are controlled. He added that production might suffer if Thailand or Vietnam have cultivation concerns.

Compared to last year, the company is exporting 5-10 vessels. Specifically, he anticipates stable bearish rice prices shortly. In a report released on April 4, Fitch Solutions Country Risk & Industry Research reported that rice production across the globe is decreasing and that prices are rising, which affects more than 3.5 billion people worldwide.

Global rice markets are forecast to record a deficit of 8.7 million tons in 2022/2023, the most significant since 2003/2004 when they recorded a deficit of 18.6 million tons. As a result of a shortfall in global rice production, commodities analyst Charles Hart warned of higher market prices.

Reports predict that high prices will persist until 2024. Rice sells for $17.30 per thousand weights (cwt), which will only reach $14.50 next year.

Some commodities markets, including rice, use the Cwt unit of weight as a standard unit. Rabobank analyst Oscar Tjakra warned that several African countries and other major rice importers would see a rise in rice import costs.

To stabilize market prices, countries will also need to reduce their domestic stockpiles, according to Kelly Goughary, a senior analyst at Gro Intelligence. The countries most affected by the deficit are Pakistan, Turkey, Syria and some African countries.

Other than the ongoing Russian invasion of Ukraine, some analysts attribute significant events to the rice shortage. Due to the conflict, Russia has been blocking Ukraine from exporting wheat and barley.

Both China and Pakistan, two major rice producers, were affected by monsoon rains and floods. Due to severe flooding last year, Pakistan’s annual rice production plunged 31%.

WMO says El Nio, expected to return this year, could also impede rice production. Water temperatures in the eastern Pacific rise during El Nios, causing more precipitation in some places than average while others are drier and warmer than usual.