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Shortage of rice in many countries, this food will not disappear from your plate, what is the condition of India?

Pankaj Prasad
Rice Shortage
Rice Shortage

Rice production is steadily declining in many parts of the world. The list ranges from China to the US and the European Union.

Rice production is steadily declining in many parts of the world. The list ranges from China to the US and the European Union. This is the biggest shortfall in the global rice market in two decades. The reason for the crisis is being attributed to bad weather in China and the Russia-Ukraine war. Due to this, the prices of rice are increasing all over the world.   

What is happening in the world with rice? Cause of rice crisis What is? Where and how much is the impact of the crisis? What is the situation in India? When will the situation be normal? Let us know…

What is happening in the world with rice?

Rice is one of the most cultivated cereals in the world. According to the latest report by Fitch Solutions, the world's largest rice producing countries China, America, European Union have sharply reduced the production of this grain. According to Fitch Solutions commodity analyst Charles Hart, there has been a shortfall of 18.6 million tonnes in the rice markets. 'Globally, rice shortages have had a clear impact, with rice prices at a decade high,' Hart said.

This report by Fitch Solutions Country Risk & Industry Research forecasts that rice prices will remain around current highs until 2024. As per the report, the price of rice was expected to average Rs 1,421 per cwt from 2023 till date, and will come down to Rs 1,191.59 per cwt in 2024. CWT is a unit of measurement for some commodities such as rice. The report states that the global shortfall for the year 2023 will be 8.7 million tonnes. This would be the biggest global rice shortage since 2003-2004.

What is the reason for the rice crisis?  

Due to the ongoing Russia-Ukraine war, the supply of rice has reduced. In addition, inclement weather in rice-producing countries such as China and Pakistan is also a contributing factor to the crisis. In the second half of last year, some parts of China saw severe heatwaves, while monsoon rains and floods destroyed crops in many places.

According to agriculture analysts, the provinces of Guangxi and Guangdong, the main centers of China's rice production, received the second highest rainfall in 20 years. Similarly, Pakistan, which accounts for 7.6 per cent of the global rice trade, saw a 31 per cent drop in annual production due to devastating floods last year.

Where and how much will the impact of the crisis be? 

Oscar Zakara, senior analyst at global food and agriculture bank Rabobank, said the crisis was triggered by year-on-year rice production in other countries such as the US and the European Union. The reduction in global rice production will increase the cost of importing rice for major rice importers such as Indonesia, Philippines, Malaysia and African countries this year.

If analysts are to be believed, domestic reserves of many countries will also face shortage. Countries most affected by the crisis will be those already plagued by high domestic food price inflation such as Pakistan, Turkey, Syria and some African countries.

Hart of Fitch Solutions says the global rice export market has also been affected by India's export ban. India banned the export of broken rice in September.

What is the condition of India?

India is the second largest rice producing country in the world after China. India, the world's top exporter of rice, banned the export of broken rice in September. In addition, a 20 percent duty was imposed on the export of certain other types of rice. Despite this, however, India's rice exports rose to a record 22.26 million tonnes last year. This figure is more than the total exports of Thailand, Vietnam, Pakistan and the United States, the world's other largest rice exporting countries. 

Whereas, according to the second advance estimates for the year 2022-23, the total production (record) of rice this year in the country is estimated at 1308.37 lakh tonnes. This is 13.65 lakh tonnes more than last year. Rice production in India also depends on the weather conditions. Meanwhile, the Meteorological Department is expecting normal monsoon rains in the country. Experts associated with the rice industry say that they do not see any problem in the country and the cost is under control.

When will the situation be normal? 

Fitch Solutions estimates that the global rice market will return to near-equilibrium in 2023-24 with total production expected to grow by 2.5 per cent year-on-year. It further predicted that rice prices would decline by about 10 per cent in 2024.