Rice soars to highest price since 2008 on rising threats to supply

Kuala Lumpur - Rice prices soared to the highest in almost 15 years in Asia on mounting concerns over global supplies as dry weather threatens production in Thailand and after top shipper India banned some exports.

Thai white rice 5 per cent broken, an Asian benchmark, jumped to US$648 (S$870) a tonne, the most expensive since October 2008, according to data from the Thai Rice Exporters Association on Wednesday. That brings the increase in prices to almost 50 per cent in the past year.

Rice is vital to the diets of billions of people in Asia and Africa, and the surge in prices could add to inflationary pressures and boost import bills for buyers.

The latest threat to supply comes from Thailand, the second-biggest shipper. The authorities are encouraging farmers to switch to crops that need less water as the nation braces for drier conditions with the onset of El Nino.

Cumulative rainfall in the key central growing region is 40 per cent below normal, and the move to curb planting is to conserve water for households. The government previously asked growers to reap only one crop this year.

In July, India

widened its shipment ban to protect domestic supplies,

spurring panic buying in some countries. The curbs exacerbated worries over a global shortage amid growing world consumption.

The price surge will aggravate stresses in global food markets that have been rocked by wild weather and reduced grain supplies from the Black Sea region because of Russia’s war in Ukraine. BLOOMBERG