(MENAFN) Rice prices are on a trajectory to reach a 15-year high, triggering apprehension in Asia and Africa, where billions rely on this staple grain for sustenance. The cost of 5 percent Thai white broken rice, considered a standard in Asia, surged by USD57 in the past two weeks, reaching USD640 per ton—hovering just below the peak recorded in October 2008. This surge followed a period of relative calm but was exacerbated by widespread export restrictions imposed by India, the world's leading rice exporter, in early August.
The unexpected spike in demand for Thai rice from unconventional importers, including Brazil and the Philippines, contributed to the escalating prices, according to Chokiat Ovasawongsi, the honorary president of the Rice Exporters Association in Thailand. Ovasawongsi noted that the surge in local prices, coupled with the strength of the Thai baht currency, played a crucial role in supporting this upward trajectory. Vietnam's rice inventory shortage further fueled the increase, prompting increased sales for Thai rice.
India's decision to tighten export restrictions in late July, anticipated to persist until the next year, aligns with Prime Minister Narendra Modi's strategy to control domestic prices ahead of upcoming elections. These measures have resulted in supply deals being impacted and diplomatic decisions influenced, as major rice consumers express concerns about the adequacy of the supply. The ripple effects of these developments are raising broader concerns about food security and economic stability in regions heavily dependent on rice as a dietary staple.