The global rice market has settled for now, yet concerns persist regarding weather-related risks, according to Al Arabiya. A senior executive at Louis Dreyfus Co (LDC), a commodities merchant, stated that although rice supplies have stabilized post last year’s surge, dry weather linked to El Nino poses a persistent threat.
Prices of rice in major Asian export centers have recently eased after a spike last year, attributed to India’s export restrictions, the world’s primary rice exporter.
Rubens Marques, LDC’s chief executive for South and Southeast Asia, noted the tight market situation caused by India’s export ban and Indonesia’s significant rice purchases, leading to price hikes. However, he expressed relief as supply and prices have steadied.
The ban on India’s exports in July disrupted a decade-long price stability, contributing to global food inflation. Marques emphasized the vulnerability of rice supplies to adverse weather, particularly the El Nino phenomenon, which induces hot, dry conditions in Asia, affecting rice-growing regions.
Looking ahead, focus is on irrigated crop production and reservoir levels in key producing countries to assess future supply. LDC, a major rice supplier to Asia, Africa, and the Middle East, faces challenges from unpredictable weather patterns fueled by climate change, disrupting supply chains.
Marques highlighted the unpredictability of weather events under El Nino, affecting trade balance. Last year’s price surge led to decreased rice demand from certain regions, particularly Africa, known for its price sensitivity.
India’s export prices hit a three-month low due to subdued demand and ample supplies, contrasting with Thailand’s stable prices. For the wheat market, Marques stressed the importance of upcoming months for northern hemisphere crops, with prices already up due to dryness in Russia and the United States.
Assessing the impact of recent rainfall in crop areas, traders are monitoring Chicago wheat futures for signs of alleviating dryness threatening yields.
