This year’s rice production is set to be its largest shortfall in roughly 20 years, according to research firm Fitch Solutions, reports CNBC. The decreased supply is hitting the Asia-Pacific region particularly hard, an area that consumes 90 percent of the world’s rice.
The firm estimates the global shortfall for the 2022/2023 growing year will hit 8.7 million tons.
“At the global level, the most evident impact of the global rice deficit has been, and still is, decade-high rice prices,” said Fitch Solutions’ commodities analyst Charles Hart.
There are many factors straining the rice supply, including the war in Ukraine and adverse weather conditions in mainstay rice-producing economies like China and Pakistan. Farmlands in China were hampered by heavy monsoon rains and floods, and Pakistan saw production decrease by 31 percent year-over-year because of regional flooding.
As a result of decreased supply, some countries, including India, are adding export restrictions to keep their supplies for their own countries.
On the horizon, however, analysts estimate that the 2023/2024 growing year could lead to a market surplus.
“It is our view that global rice production will stage a solid rebound in 2023/24, expecting total output to rise by 2.5 percent year on year,” Fitch’s report forecast, as long as India acts as a “principal engine” of global rice output over the next five years. Full Story
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