Fitch Ratings has issued a stern warning in a recent report, projecting a potential surge in world rice prices due to the ongoing catastrophic flooding in China, the globe’s leading rice producer.
The aftermath of Typhoon Doksuri has wreaked havoc across China over the past few weeks, resulting in widespread and severe flooding. Notably, the city of Beijing experienced its worst rainfall in 140 years. The deluge has also significantly impacted Inner Mongolia, Jilin, and Heilongjiang provinces – areas collectively responsible for producing 23% of China’s total rice output.
Fitch reports that the rice-growing regions in these provinces have been significantly affected by the torrential rains associated with Typhoon Doksuri.
Unfortunately, the situation may exacerbate as Typhoon Khanun advances toward northern China, posing a substantial threat to the already inundated regions. The excessive rainfall has already led to flooding in farms and is anticipated to substantially reduce this year’s rice yields.
Recent data from the Food and Agriculture Organization (FAO) global rice price index reveals a concerning trend. The index surged by 2.8% in July, reaching 129.7 points. This increase was attributed to India’s halt on rice exports and unfavorable weather conditions that have taken a toll on production.
Notably, the figure has surged by a staggering 19.7% compared to the corresponding period the previous year, marking the highest level since September 2011.The FAO has underscored mounting worries regarding the potential impact of El Niño on the rice production of several nations, which has directly contributed to the soaring rice prices. The situation is further exacerbated by the disruptive influence of heavy rainfall, particularly in Vietnam, which is currently in the process of its summer and autumn harvest
.In a notable move, the Indian government recently imposed an immediate export ban on white rice, excluding Basmati rice, effective from July 20. India commands a substantial share of more than 40% in global rice exports. However, the Food and Agriculture Organization expressed deep concerns regarding India’s suspension of exports, highlighting the potential threat to global food security.
As Fitch Ratings sounds the alarm over the impending surge in world rice prices in the backdrop of China’s disastrous floods, the global community remains apprehensive about the ramifications of these interconnected events. The vulnerability of rice-producing regions to extreme weather events underscores the importance of concerted efforts to ensure both domestic and global food security.