The French Rice Processors Federation fears a significant reduction in global rice production, mainly due to the extreme weather events that have occurred in major producing countries in recent months, according to the French commercial FM TV website on Oct. 16. Rice prices are expected to rise soon.
According to the French Rice Processors Federation, the future rice supply faces numerous risks.
The federation's president, Thierry Lievain, predicted that supply difficulties could arise "from February/March next year". Will it be so bad that the rice shelves of major supermarkets will be empty? It is not impossible. Liévin warned that "although there will not be a complete cut-off, the supply will at least be seriously affected."
Although France is able to produce 50,000 tons of rice per year, it still relies more on imports to meet national demand (large French supermarkets sell 240,000 tons per year). This year, however, multiple events suggest that total global rice production will decline significantly.
Reports indicate that various rice varieties will be affected. The first to bear the brunt is the Indian fragrant rice, which accounts for 45% of rice sales in medium and large supermarkets. Its main producers, India and Pakistan, have seen heat waves and heavy rains in recent months, and at least 250,000 tons of rice and the necessary infrastructure for transporting the commodity (roads, bridges, etc.) have been destroyed as a result.
Faced with this situation, both India and Pakistan will "prioritize the needs of their populations" by limiting exports, explained Leewane.
He added that rice will henceforth be "a product that is barely mobile and largely consumed locally.
The global output of 580 million tons of rice per year, the normal export volume of slightly more than 50 million tons, of which 21.5 million tons from India.
In addition, India announced a series of restrictions in September, including a ban on exports of broken rice and a 20 percent export tariff on white and brown rice (i.e., whole-grain rice).
Steamed grain rice, which consumes a lot of energy in the production process, accounts for 40% of rice sales in large supermarkets, but production of this type of rice is also expected to decrease due to the same momentum of soaring gas and electricity prices in Asian rice-producing countries.
Europe's annual rice production of less than 3 million tons will be even further reduced. The French Rice Processors Federation noted, "Rice in all European countries (mainly Italy, Spain and Greece) is in a state of water shortage throughout the growing cycle." Lievan said, "Overall European production is expected to be reduced by 20 to 25 percent."
Global production cuts due to extreme weather events will naturally exacerbate the upward inflationary momentum already seen in recent months, the report said.
In addition to soaring energy prices, the war in Ukraine has led to higher wheat and corn prices, forcing some countries to turn to broken rice from Myanmar or India to feed their livestock, "which has contributed significantly to the bullish market atmosphere," Leevan cautioned.
In addition, the European Union raised import tariffs on brown rice from Sept. 1, and the dollar has been strengthening against other currencies. Lievan stressed, "This makes it costly to import because we all buy goods in dollars and then sell them in euros."
Transport costs, which have increased to five times their original level since the outbreak of the health crisis, have now "remained stable". However, Lievan regretted, "We still have difficulty finding enough containers."
Reports indicate that the cost of the rice industry has risen by 30% in a year. On the consumption side, data from France's National Institute of Statistics and Economic Studies show that rice prices on the shelves in September have risen by more than 12 percent from the level of the same period last year.
Liévin pointed out that at this stage, "because there are still stocks of goods", all the cost increases "have not yet been fully passed on to prices". But, he warned, "prices will rise in the future."