Since Russia’s military invasion of Ukraine, global commodity prices have skyrocketed. Rice prices in particular have skyrocketed as investors believe that rice will become a popular alternative to wheat, which has become an expensive commodity as Russia is a major global wheat supplier.
Bloomberg reported that wheat exports from Russia and Ukraine accounted for more than 25% of the global wheat trade. Corn exports accounted for one-fifth of the world market, while cargo shipments in the Black Sea region were hit hard by tensions.
“Everyone’s trying to buy every type of starch they can. With wheat supplies tightening up dramatically on the world market, you’re going to see demand shifting to rice to fill that need to feed people,”said Arlan Suderman, chief commodities economist at StoneX
Wheat, oil, and fertilizer prices are rising as Russia and also Ukraine are large suppliers of essential commodities. The war in Ukraine certainly raises concerns for supply chain disruptions, as many countries, especially in Europe, are dependent on supplies from Russia and also Ukraine.
Rice prices have already risen over 4% bringing the price to $16.89 per 100 pounds. Wheat prices have already jumped 20.6% this week alone.
The amount of rice on the world market is still very high. An estimated 400,000 tons will be added to global rice stocks from India, the world’s largest rice exporter.
In the United States, spring rice planting has begun in Louisiana and areas along the Texas coast. About half of the production in these areas will be exported to the world market.