Rice prices may continue to rise in Arakan State, businesspeople warn

  • Rice merchants and businesspeople have said the prices of rice in Arakan State may continue to rise.

    The price of a sack of Paw Hsan Mwe rice averaged between K46,000 and K50,000 in Arakan State before prices began to rise. The price has increased by around K10,000, from K50,000 in early August to K60,000, according to rice dealers.

    Previously, one bag of low-grade rice was about K31,000, but now the price has increased to about K34,000, according to rice merchants.

    U Zaw Than Aung, a rice seller, said that since farmers in Arakan State only grow monsoon paddy on a commercial scale and there is still a shortage of paddy in the market, the price of rice may continue to rise.

    “Arakanese farmers grow only monsoon paddy on a commercial scale. We still need time to harvest the monsoon paddy, and the consumption of rice is on the rise, so the price of rice will continue to rise again,” he added.

    U Khin Maung Gyi, a local businessman, said the price of rice in the market has increased by about 10 percent, and due to the scarcity of paddy in the market, the rice price may rise even more.

    “The paddy stocks in the hands of merchants are not as much as they should be and there is still time to harvest paddy. As the price of rice rises, the rice dealers will raise the price, so the price of rice will continue to rise,” he said.

    U Khin Maung Gyi continued that the price of rice may be spurred to even greater heights due to skyrocketing fertiliser prices this year, numerous people abandoning farming, and damage to rice fields related to climate change.

    “At the moment, due to the drought, the rice crops are unable to survive, and it is known that about 50 percent of the planted acres have been destroyed. And because farmers can’t use enough fertiliser, next year’s rice yield will certainly drop. If the yield of rice goes down, the price of rice may rise again,” he added.

    Ko Nyi Khaing Thwee, a young Arakanese composer, pointed out that if the price of rice, the main staple food for Myanmar, increases due to the Covid-19 pandemic and the country’s ongoing political crisis, the grassroots could face many difficulties.

    “At this time, all people are facing various difficulties and are struggling to make ends meet. How will the grassroots cope with their livelihood hardships if the rice price continues to rise?” he said. “The grassroots are the first to suffer from political and economic instability. If only the grassroots face livelihood hardships, everything can explode. So, those concerned will need to deal with this issue carefully.”

    Rice dealers and residents have urged officials and businesspeople to take effective measures to help farmers solve the rice price increase caused by post-coup political turmoil.

  • Rain shortage may dampen India’s battle against inflation – here’s why

  • India's ability to produce rice is in danger. Photo: AFP 

    In the past two weeks, prices of several varieties of rice have increased by more than 10% in important rice-growing states including West Bengal, Odisha and Chhattisgarh.

    India, by far the world's largest exporter, has had a lack of rain in some areas. As a result, planting fields for rice have shrunk to their smallest size in almost three years. This could provide a new challenge for the world's food supply.

    At a time when nations are struggling with skyrocketing food prices and rife inflation, India's ability to produce rice is in danger. Due to a shortage of rainfall in some areas, particularly West Bengal and Uttar Pradesh, which account for a quarter of India's output, the total area planted with rice has decreased by 13% thus far this season.

    With Bangladesh, China, Nepal, and certain Middle Eastern countries among its top clients, India exports rice to more than 100 countries. In the upcoming weeks, the US is expected to produce a bountiful harvest of wheat, and Ukraine has sent its first grain shipment since Russia's invasion.

    Traders are concerned that a decline in rice production could make India's battle against inflation more difficult and lead to export restrictions. For the billions of people who depend on the food staple, such a decision will have significant ramifications. In order to protect food security and maintain local prices, the government has already restricted wheat and sugar exports from India, which accounts for 40% of the world's rice trade.

    Meanwhile, India's rice prices have increased, which reflects worries over production. Due to insufficient rain and increased demand from Bangladesh, prices of some types have jumped by more than 10% in the past two weeks in major growing states like West Bengal, Odisha, and Chhattisgarh, according to Mukesh Jain, a director of rice shipper Sponge Enterprises Pvt. According to him, free-on-board export pricing could increase to $400 per tonne by September from as much as $365 at the moment.

    Asia produces and consumes the majority of the world's rice, making it essential for the region's political and economic stability. Rice prices have been moderated as a result of plentiful production and stockpiles, in contrast to the spike in wheat and corn prices following Russia's invasion of Ukraine, which has helped prevent a worsening of the food crisis.

    The success of the monsoon and the Indian rice crop will have a significant impact. According to some agricultural specialists, there is still time to plant more crops and make up part of the gap. August through September are expected to have typical rainfall, which could increase crop production.

    Farmers are less upbeat. Rajesh Kumar Singh, 54, a grower in Uttar Pradesh, said he planted rice on only half of his seven acres (2.8 hectares) of land due to a lack of rain in June and July. “The situation is really precarious," he said.

    Rice prices are feeling the pressure, said Himanshu, a professor at Jawaharlal Nehru University, who goes by only one name. “Rarely any sowing happens after mid-July, so the hope that it will recover is unlikely to be the case," he said, adding that a drop in output is a risk to inflation.

    Rice may provide a new obstacle in India's fight against inflation. This year, consumer prices continued to exceed the Reserve Bank of India's tolerance level of 6 percent, which caused a dramatic increase in interest rates. As the impact of declining commodity prices, such as those for fuel and vegetable oils, is somewhat countered by a weakening rupee this week, the central bank may raise borrowing costs further.

    If geographic disparities in rainfall persist, it could have a detrimental impact on crop production, negatively impacting economic growth and inflation, according to Sonal Varma, an economist at Nomura Holdings Inc.

    With India’s paddy output poised to decline in several states, the government should consider reviewing its policy of allocating rice for ethanol production, according to Siraj Hussain, a former secretary of India’s agriculture ministry.

    India seeks to boost ethanol production using surplus sugar and rice as part of efforts to cut its fuel costs. Surging food prices following the war in Ukraine have increased the risk of hunger and sparked a “food versus fuel" debate.

    “At this point of time, it is difficult to estimate the exact level of production loss," Hussain said. But at current prices, there’s hardly any justification in allocating rice for ethanol output, he added.

  • India’s faltering rice output can cause a new food crisis

  • Threat to the output of the world’s biggest rice exporter comes when food costs are soaring, inflation rampant globally.

    A shortage of rain in parts of India has caused the rice planting area to shrink [File: Anindito Mukherjee/Bloomberg]

    Rice could emerge as the next challenge for global food supply as a shortage of rain in parts of India, by far the world’s biggest exporter, has caused planting area to shrink to the smallest in about three years.

    The threat to India’s rice production comes at a time when countries are grappling with soaring food costs and rampant inflation. Total rice planted area has declined 13% so far this season due to a lack of rainfall in some areas, including West Bengal and Uttar Pradesh, which account for a quarter of India’s output.

    Traders are worried that a drop in rice production will complicate India’s inflation fight and trigger restrictions on exports. Such a move will have far-reaching implications for the billions of people that depend on the staple. India accounts for 40% of global rice trade, and the government has already curbed wheat and sugar exports to safeguard food security and control local prices.

    The jump in India’s rice prices reflect concern about output. Prices of some varieties have soared more than 10% in the past two weeks in major growing states such as West Bengal, Odisha and Chhattisgarh due to deficient rain and increased demand from Bangladesh, said Mukesh Jain, a director at Sponge Enterprises Pvt., a rice shipper. Export prices may climb to $400 a ton by September from as much as $365 now on a free-on-board basis, he said.

    Most of the world’s rice is grown and consumed in Asia, making it vital for political and economic stability in the region. In contrast to the surge in wheat and corn prices after Russia’s invasion of Ukraine, rice has been subdued due to ample production and stockpiles, helping to ward off a bigger food crisis.

    Much is riding on the rice crop in India and the monsoon’s progress. Some agricultural scientists are optimistic that there’s still time to continue planting and make up for some of the shortfall. Rain is forecast to be normal for August to September, which may improve crop output.

    Farmers are less upbeat. Rajesh Kumar Singh, 54, a grower in Uttar Pradesh, said he planted rice on only half of his seven acres (2.8 hectares) of land due to a lack of rain in June and July. “The situation is really precarious,” he said.

    Rice prices are feeling the pressure, said Himanshu, a professor at Jawaharlal Nehru University, who goes by only one name. “Rarely any sowing happens after mid-July, so the hope that it will recover is unlikely to be the case,” he said, adding that a drop in output is a risk to inflation.

    Rice could present a fresh challenge to India’s inflation fight. Consumer prices have maintained above the Reserve Bank of India’s tolerance limit of 6% this year, prompting a sharp rise in interest rates. The central bank may increase borrowing costs further this week as a weakening rupee offsets the impact of falling commodity prices such as fuel and vegetable oils.

    If geographic disparities in rainfall persist, it could have a detrimental impact on crop production, negatively impacting economic growth and inflation, according to Sonal Varma, an economist at Nomura Holdings Inc.

    Top Customers

    India supplies rice to more than 100 countries, with Bangladesh, China, Nepal and some Middle Eastern nations among its largest customers. For the world at large, there are some bright spots when it comes to food security. The US is poised to deliver a bumper wheat crop in the coming weeks, while Ukraine made its first grain shipment since Russia’s invasion.

    With India’s paddy output poised to decline in several states, the government should consider reviewing its policy of allocating rice for ethanol production, according to Siraj Hussain, a former secretary of India’s agriculture ministry.

    India seeks to boost ethanol production using surplus sugar and rice as part of efforts to cut its fuel costs. Surging food prices following the war in Ukraine have increased the risk of hunger and sparked a “food versus fuel” debate.

    “At this point of time, it is difficult to estimate the exact level of production loss,” Hussain said. But at current prices, there’s hardly any justification in allocating rice for ethanol output, he added.

  • Global food prices are soaring. Rice could be next

    • Food prices have been on the rise in the past few months, and export bans have followed.
    • Rice could be next in line. The United Nations’ Food and Agriculture Organization Food Price Index already shows international rice prices creeping up for the fifth straight month to reach a 12-month high.
    The spider web rice fields in Flores, Indonesia. The United Nations’ Food and Agriculture Organization Food Price Index shows international rice prices creeping up for the fifth straight month to reach a 12-month high, according to the latest May data published last week.

    Food prices have been on the rise in the past few months. And rice, a staple food in much of Asia, could be next, industry watchers said.

    The prices of many foods, ranging from wheat and other grains to meat and oils, have shot up. That’s been driven by a slew of factors, including the rising cost of fertilizer and energy in the past year as well as the Russia-Ukraine war.

    Food export bans or serious disruptions have included those from India (wheat), Ukraine (wheat, oats and sugar, among others) and Indonesia (palm oil).

    Rice could be next in line. The United Nations’ Food and Agriculture Organization Food Price Index already shows international rice prices creeping up for the fifth straight month to reach a 12-month high, according to the latest May data published last week.

    To be sure, rice production is still bountiful, experts said. But rising wheat prices, and the generally higher costs of farming, would make rice prices worth monitoring next.

    “We need to monitor rice prices going forward, because rising wheat prices could lead to some substitution towards rice, increasing demand and lowering existing stocks,” said Sonal Varma, chief economist at Japanese bank Nomura.

    Risk of protectionism

    Protectionist measures “actually worsen price pressures at a global level for various reasons,” she told CNBC’s “Street Signs Asia.” Feed and fertilizer costs for farming are already rising, and energy prices are adding to freight costs, she added.

    “So there is a risk that we see more protectionism from countries,” said Varma.

    Nevertheless, she maintained that risks to rice are still low as global rice inventories are ample and harvests in India are expected to be good this summer.

    https://datawrapper.dwcdn.net/CkDgK/2/

    Russia’s war on Ukraine has driven up wheat prices. Both countries are major exporters of wheat, and Russia’s invasion has disrupted farming and blocked grain exports from the country. Wheat prices have soared more than 50% since a year ago.

    On Monday of last week alone, they jumped 4% after the Russian military destroyed one of Ukraine’s largest grain exporting terminals, according to Reuters, citing Ukrainian authorities.

    Thailand and Vietnam were in talks on a deal to increase the price of their rice exports, according to a Reuters report citing a Thai government official in late May.

    Four exporters told Reuters that rice traders have been buying more Indian rice in the last two weeks, according to a June 6 report.

    “Right now, I will be much more worried by India slapping an export ban on rice in the coming weeks — as they were thinking about after wheat and sugar,” David Laborde, senior research fellow at the International Food Policy Research Institute, told CNBC.

    India and China are the world’s top two producers of rice, accounting for more than half of the global total, according to the World Economic Forum. Vietnam is the fifth-largest, while Thailand is in sixth place.

    India imposed export bans on wheat in May, citing a need “to manage the overall food security of the country.” It also slapped restrictions on sugar just days after the wheat ban.

    Are price hikes preferable?

    Laborde said that a price increase would be far preferable to any export ban.

    “We should really differentiate between a price rise that compensates for higher costs and will benefit farmers (and help them producing), than an export ban” that pushes prices up on world markets but pushes prices down on domestic markets, he said.

    Nafees Meah, regional representative for South Asia at the International Rice Research Institute, added that energy costs, which have been rising globally, are a big part of rice production costs.

    “So there is an argument to say … if the market is indicating an increase in price then why shouldn’t the farmers benefit from increased prices?” Nafees told CNBC’s “Squawk Box Asia.”

    But an increase in rice prices would badly affect many in Asia, which is the biggest consumer of the staple.

    “So in in the Southeast Asia Pacific region, countries like East Timor, Laos, Cambodia and of course, places like Indonesia, which [has a] very large population, and many of whom are food insecure will be pretty badly affected if prices continue to rise and stay at these very high levels,” said Nafees.

    Way above pre-pandemic levels

    The U.N.’s food price index showed prices are now 75% above pre-pandemic levels, said Frederique Carrier, managing director and head of investment strategy for RBC Wealth Management.

    “Pandemic-related labor shortages and Russia’s invasion of Ukraine have aggravated the situation by both curtailing food supply and pushing up energy prices even further,” she wrote in a June report.

    About a third of food production costs are energy-related, Carrier said. Fertilizer in particular is very energy-intensive to produce and prices have soared since last year.

  • Sri Lanka economic crisis pushes price of food items to ‘unbearable levels’, rice now selling at over Rs 200 per kg

  • Reeling under severe economic crisis, the Sri Lankan government is now forced to restrict the import of a host of essential commodities, including food items Sri Lanka economic crisis pushes price of food items to 'unbearable levels', rice now selling at over Rs 200 per kg Colombo: Sri Lanka is already under an unprecedented economic crisis and amid this people being burdened further as prices of food essentials are soaring high. Buying rice has become dearer in the island nation as the price of the foodgrain has risen to "unbearable levels" in the island nation. A report by Colombo Page mentioned consumers in Sri Lanka saying that the minimum price of a kilogram of rice in the general market has now surged Rs 200-240. Reeling under severe economic crisis, the Sri Lankan government is now forced to restrict the import of a host of essential commodities, including food items which has pushed the price of essentials such as milk powder and rice exceptionally high. Meanwhile, the Ministry of Trade says that rice is being sold at concessionary prices by wholesale network Lanka Sathosa outlets, it was learned from several CWE outlets that imported rice was not meeting the mounting demand. The report further said that Sathosa outlets in many parts of the country are in short supply of essential consumer items including rice, dried chillies and other items. In Sri Lanka, consumers have been demanding the government to take steps to reduce prices by importing rice or setting a control price. Sri Lanka is battling a severe economic crisis, with food and fuel scarcity affecting a large number of the people in the island nation. The economy has been in a free-fall since the onset of the COVID-19 pandemic, leading to the crash of the tourism sector. Sri Lanka is also facing a foreign exchange shortage, which has, incidentally, affected its capacity to import food and fuel. The country is facing long power cuts. The country is also witnessing protests over the government's handling of the worst economic crisis in decades. Yesterday, a protest was held outside the US Embassy in Colombo against the Sri Lankan government.  
  • In Rohtak, basmati fetches record price

  • In Rohtak, basmati fetches record price The price of 1121 variety of basmati rice has witnessed a considerable jump in the open market in Haryana, fetching up to Rs 1,061 per quintal more compared to last time. On Monday, a rice grower from Sheria village in Jhajjar district sold his produce for Rs 4,561 per quintal at the grain market here even as private traders had bought it for maximum Rs 3,500 last year. “We sow 1121 variety of basmati rice over 20 acres every year and store about 150 quintal for subsequent sale. Even we hadn’t expected this much gain,” said an ecstatic Naveen, the rice grower. Bhartiya Vyapar Mandal vice-president Harsh Girdhar cited several reasons for the high rates, including decrease in 1121 basmati sowing area, new markets in Iraq and Iran and global grain crisis due to the Russia-Ukraine conflict. He said rice growers had been storing some portion of their produce to sell it during off-season when it fetched higher returns. “The area under PR variety of rice, procured by the government on the MSP, rising considerably last year was another factor behind the hike in the price.”    
  • Inflation pulls down demand for cooking oil, Basmati, chicken

  • Rising prices and inflationary pressure have pulled down demand for branded basmati ricecooking oil and chicken by up to 15% in March compared to the same time last year. Russia's invasion of Ukraine that started in last week of February has seen global commodity prices surging as supply chain was disrupted. Global prices of basmati rice had gone up by $200 per tonne since the war started. "The impact of global price rise is also being felt in the domestic market. This has tapered the demand in the Indian market. It is down by 15 per cent. We are seeing that people are shifting to regional rice varieties, which are comparatively lesser priced than basmati," said Gurnam Arora, joint managing director, Kohinoor Foods that sells basmati rice under the Kohinoor brand name. Even prices of regional varieties of rice have seen a price hike as export demand is robust.  
  • Sri Lanka Facing Worst Economic Crisis; Price of Rice Goes up to Rs 500 per kg

  • Srilanka is facing an economic crisis that has led to food scarcity and inflation in prices in the country.
    People Waiting In Queue To Buy Groceries
    In the middle of its worst economic crisis in decades, Sri Lanka has been hit by a critical shortage of basic necessities such as medicine, food fuel, cooking gas, etc. People are queuing for hours for petrol and diesel. Citizens are facing daily power outages caused by the lack of fuel to power the powerplants, and the warm season has depleted hydroelectric power capacity. The Central Bank has permitted the national currency to move more freely earlier in the month which has caused inflation in prices. Food and beverage prices in Sri Lanka have skyrocketed due to inflation. People are waiting in queue for hours to buy groceries. The price of rice in Sri Lanka has risen to 500 Sri Lankan rupees per kg. In Sri Lanka, 400 grams of milk powder costs Rs 790. In the last three days, the cost of milk powder has risen by Rs 250.

    Food Scarcity Is Driving People To Flee

    The financial downturn in Sri Lanka is causing a big impact on the coastline areas of southern India, particularly Tamil Nadu as Tamil refugees are fleeing from the northern part of the island country. On Tuesday, two groups of 16 Sri Lankan Tamilian citizens from the Manna and Jaffna parts arrived in Tamil Nadu. As per the reports, Tamil Nadu intelligence officers have learned that roughly 2,000 refugees are expected to arrive in the upcoming days.

    What Has Led To The Crisis?

    The economy of Sri Lanka is highly dependent on tourism activities and trade. The pandemic has been utterly devastating, with the government assessing a $14 billion loss over the course of the past two years. According to the central bank, the economy will contract by 1.5 percent between July and September 2021. Sri Lanka, which has been depleting reserves and massive debts to pay, is in desperate need of foreign currency, with a $7 billion debt obligation for 2022. Sri Lanka's foreign currency reserves are shrinking, in part due to the non-building projects funded by Chinese loans.  
     
  • Prices rise across major hubs on higher demand for rice

  • Prices of rice exported from top Asian hubs jumped this week on solid demand, while Vietnamese traders also flagged high shipping costs due to the Ukraine crisis. Thailand's 5% broken rice prices rose to $415-$428 per tonne, on average a peak since late June, from $400-$403 a week ago. As corn and wheat prices rise, animal feed makers were looking to use more broken rice, pushing up prices across the board, Bangkok-based traders said. Another trader said he recently received interest from buyers in Europe, the United States, Iraq and Iran for different grades of Thai white rice. Demand from Hong Kong has also increased, the trader said, with concerns over plans for a city-wide lockdown sparking panic buying by residents. Thailand exported 459,752 tonnes of rice worth $234 million in January, up 8.92% from the same period last year, the commerce ministry said. Rates for top exporter India’s 5% broken parboiled variety rose to $371-$378 per tonne from last week's $370-$376, also a peak since mid-June. "Consumers are trying to build stockpile due to the rally in wheat and corn prices. Demand is improving for rice," said an exporter based at Kakinada in southern state of Andhra Pradesh. Vietnam's 5% broken rice prices rose to their highest since December at $410-$415 per tonne on Thursday, versus $400 last week, amid higher demand, traders said, with the Ukraine-Russia conflict prompting buyers to place more orders from elsewhere in Asia. Another trader said shipping costs had surged since the Ukraine-Russia conflict began, with international freight costs rising 50% and domestic freight costs climbing 70%-80%. "We're concerned costs will keep rising if the conflict continues," the trader said. Traders said farmers in the Mekong Delta had harvested 20%-25% of the winter-spring crop. Domestic rice prices in Bangladesh remain high despite good crops and reserves, traders said, adding that the global market was seeing a hike due the Ukraine-Russia conflict. "It is very much unlikely that local prices will come down soon," a trader said.
  • Biryani plate becomes dearer as rice prices go up

  • The mouth-watering biryani is being packed in a plastic tub at an outlet. (Right) A rice shop in Jodia Bazaar.—Fahim Siddiqi / White Star KARACHI: The retail prices of various varieties of rice have been increased by up to Rs40 per kilo almost a month before Ramazan. Traders claim that the prices have been raised due to rise in exports and high transportation cost. The retail price of medium quality basmati is now Rs200 as compared to Rs160 per kg while normal basmati is selling at Rs150-160 instead of Rs120-130 per kg. Premium basmati is now priced at Rs250 per kg. A biryani shop owner said he had to pass on the impact of price hike of at least Rs10 per plate to customers as he was compelled to procure basmati Sella rice at Rs20-30 per kg higher rate from wholesale markets. He said he sold a biryani plate at Rs130. “Some other outlet owners are selling at Rs140 per plate depending on the area.” In bigger food shops, premium basmati rice biryani (double plate) is being sold at Rs300-330 and single plate at Rs170-200. While it is not easy for a buyer to judge the quality of rice in biryani, traders and biryani restaurants take full advantage of this ignorance by mixing various varieties. General secretary of the Karachi Retail Grocers Group (KRGG) Farid Qureishi said that price jump in basmati and other varieties of rice was not a matter of concern for the rich who continued to buy expensive commodities without any problem in higher quantities for monthly consumption. He said, however, the lower and middle income groups, who are hit hard by rising food inflation and utility bills, had been limiting their buying as per their requirement. A member of the Rice Exporters Association of Pakistan (REAP), Anis Majeed, said that despite a drop in transportation cost after Rs10 reduction cut in fuel rates on March 1, rice prices had been soaring owing to previous massive hikes in transportation cost because of diesel and petrol rates. He said exports were in full swing, thus putting pressure on local prices despite the fact that exports were made at a very low wholesale rates. Rupee devaluation against the dollar is certainly benefiting exports. Pakistan’s rice production is over seven million tonnes per annum in which exports have been hovering between 3.5 and four million tonnes while the rest is consumed domestically. Export destinations are Europe, Gulf countries, Australia, US, China, African countries, the Far East, etc. According to figures of the Pakistan Bureau of Statistics, basmati exports rose by 41pc and 414,190 tonnes of rice were exported in seven months of fiscal year 2022 from 293,761 tonnes in the same period of the last fiscal year. In terms of value, it is a jump of 28per cent, i.e., $362 million from $282 million. Other varieties of exports grew by 13pc, 2.138m tonnes from 1.886mn tonnes, while it went up by 5.56pc in terms of value, $924mn from $876mn, in seven months of fiscal year 2021. Mr Anis said due to massive hike in freight rates and lack of availability of shipping containers, rice exporters had chartered two to three bulk vessels destined for African countries in the last three months to load rice cargo in these vessels. Each vessel had carried 35,000-40,000 tonnes of rice. Besides, demand from China for Pakistani rice also remained high. In financial year 2021, export of other varieties had plunged to 3.062 million tonnes fetching $1.465 billion as compared to 3.3 million tonnes valuing $1.39bn in FY20. Basmati exports earned $575 million from 629,069 tonnes in FY21 from 865,949 tonnes earning $783mn in FY20. Rice exports in FY21 remained subdued due to low price offered by India for non basmati and higher freight charges from October 2020 amid Covid-19 pandemic. However Chinese buying of Pakistani non basmati rice kept the exports moving.