The specter of the El Niño phenomenon is starting to cast its shadow over Asia, raising concerns and exerting pressure on the rice market, which is grappling with its first-ever encounter with this climatic anomaly.
The rice market has already been reeling from the effects of rice export restrictions imposed by India, a major rice exporter. Now, the drier conditions brought on by El Niño threaten to exacerbate the situation. Any reduction in rice production could pose a risk to the global supply chain and potentially serve as a catalyst for a resurgence in rice prices, following a recent decline from their highest levels in nearly 15 years.
Countries across Asia are sounding the alarm over the looming El Niño threat. Indonesia, a significant rice importer, has expressed concerns that domestic rice production might suffer mild repercussions. Meanwhile, Vietnam has advised its farmers to alter their planting schedules, encouraging them to sow rice earlier than usual to preempt water shortages. In the Philippines, efforts are underway to assist farmers in coping with the inflationary pressures on rice prices.
The growing apprehension within the agricultural sector is a clear indicator of the potential ramifications of El Niño. El Niño is a cyclical climatic phenomenon notorious for causing a range of issues, including crop damage, disruptions to power grids, and adverse impacts on fishing and mining activities. This is primarily due to the occurrence of flooding and drought in various regions across Asia, Africa, and South America.
Mr. Muhammad Shakirin Mispan, an Associate Professor at the Institute of Biological Sciences, University of Malaya, warned that “many crop varieties, particularly those heavily reliant on water, will be significantly affected by the El Niño phenomenon.” Reduced output from major rice-producing nations could have a profound impact on the global rice supply, making this issue a global concern rather than confined to Southeast Asia.
The rice market has been in turmoil for several weeks, especially since India introduced stricter controls on rice exports at the end of July. This move raised alarm bells among governments in Asia and Africa, triggering diplomatic negotiations and several agreements to secure rice supplies. It also led to concerns of rice hoarding, ultimately resulting in higher rice prices in countries such as the Philippines and Indonesia.
In a broader context, El Niño is expected to usher in hotter and drier conditions across various parts of Asia, potentially leading to droughts and an increased risk of forest fires.
Indonesia, which is bracing for the impact, has announced plans to import more rice in both 2023 and the following year. They have also warned that rice output in 2023 might decrease by 1.2 million tonnes, with the anticipated production reaching 54.5 million tonnes, a slight decline compared to the previous year.
In Vietnam, the world’s third-largest rice exporter, farmers in the Mekong Delta have been advised to commence rice planting earlier this year, starting from the beginning of October rather than the typical November schedule. This decision is aimed at mitigating the potential water shortages triggered by the El Niño phenomenon, which could persist until the end of the harvest.
Rice production in the Mekong Delta accounts for a substantial 26% of the region’s rice output, primarily during the winter to spring seasons, making it a crucial player in the global rice supply chain.