Any price increases from stable Asian demand may be capped by ample rice supply in major exporters, which will likely more than offset an anticipated decline in production due to crop damage from floods in China and Pakistan.
Floods decimated large portions of Pakistan, the fourth-largest exporter of rice in the world, causing significant damage to agriculture, including rice production. Meanwhile, China, the world’s largest importer of the food staple, has seen a decline in rice production due to the extreme heat at the end of August.
However, the world’s rice supplies are currently enough, and the forecast for the Indian crop is improving, which should allay supply fears and restrain price hikes brought on by the recent surge in Bangladeshi demand, according to a trader at one of the leading rice trading firms in Singapore.
According to traders, Pakistan is expected to have lost 10% of its projected 8.7 million tonnes of rice production by 2022, and China has also experienced crop losses, but it is unclear how much.
As severe rains destroy crops and disrupt supply, food prices have skyrocketed in markets across Pakistan. This is a warning sign that food shortages are being brought on by the greatest floods in decades at a time of economic unrest.
