Fluctuations in rice prices, What will be the impact on the global economy and India
Over the past year, international rice prices have risen significantly. The primary factors driving global market prices have been El Niño and export restrictions by India, the world’s largest rice exporter. However, since January 2024, as El Niño conditions ended, prices have started to decline. Fertilizer prices have dropped substantially from their mid-2022 peaks and have stabilized over the past year. These factors provide optimism that international rice prices will stabilize or potentially decline further in the near future.
Fluctuations in the Global Rice Market:
The global rice market has experienced fluctuations during the first few years of this decade. While global wheat and maize prices more than doubled from August 2020 to May 2022 due to the war in Ukraine, global rice prices remained relatively stable. In August 2022, the Food and Agriculture Organization (FAO) indica rice price index was only 4% above its level in January 2020, at the onset of the COVID-19 pandemic.
Recent Surge in Rice Prices:
However, international rice prices have seen a substantial increase since August 2022, with the FAO indica rice price index rising by 45% between that time and its peak in January 2024.
Main Factors behind the Price Increase
Over the past year, the key drivers behind the increase in indica rice prices on the global market have been weather concerns, particularly El Niño, and export restrictions by India. The decline and stabilization of fertilizer prices have contributed to the likelihood of price stability or further reduction in the near future. Despite recent volatility and price hikes in the international rice market, there is hope for stability in the future.
Impact of Climate Change on Rice Production: Drought, floods, saltwater intrusion, and extreme temperatures jeopardize the livelihoods of 144 million smallholder rice farmers each growing season. Traditional cultivation methods, such as flooding paddy fields and burning rice straw in open fields, contribute approximately 10% of global man-made methane emissions, a potent greenhouse gas.
IRRI’s Role in Developing Climate-Responsive Solutions: The International Rice Research Institute (IRRI) develops and adapts climate-responsive solutions. Working with extension agents, national research institutions, and governments across South Asia, Southeast Asia, and Africa, IRRI promotes sustainable rice-based food systems.
