Rice prices hit a 15-year high

Prices for rice, a staple food in many countries, have hit a 15-year high after a period of stability amid adverse weather. Brazil will increase its rice imports after heavy flooding in the south of the country, and Indonesia will continue to buy significant volumes in the future.

India, the world's largest seller of rice, imposed restrictions on rice exports last year, which affected prices. And the drought caused by the El Nino phenomenon will reduce production in the main growing region - Southeast Asia.

Prices for Thai white rice, Asia's benchmark, hit a 15-year high in January, then eased slightly before rebounding by $71/t to $649/t in April. Rice is the main product of the diet of billions of people in Asia and Africa, so its price increase will lead to new jumps in inflation.

The floods in Brazil coincided with the rice harvest, which will have a negative impact on production and prices.

In the state of Rio Grande do Sul, where 70% of Brazil's rice is grown, bad weather will prevail for several more weeks.

Last week, the country's president said that due to heavy rains, Brazil will have to import rice and soybeans, even though it ranks 9th among the world's rice exporters, according to the US MSG.

An additional reason for the increase in prices is the delay in deliveries from Southeast Asia, as the harvesting of the off-season harvest has been completed in Thailand, and the main winter-spring harvest in Vietnam. These countries rank 2nd and 3rd among world rice exporters.

At the same time, Indonesia continues to import significant amounts of rice, which also supports prices. The volume of its imports against the background of a possible change in export restrictions in India will further affect prices, along with weather conditions in Thailand, Vietnam and India, where the El Nino phenomenon will soon replace La Niña.