Global trading prices for rice rose to highest level in 7 years due to export restrictions
Global rice price movements typically have major impacts on import levels in price-sensitive markets, particularly in sub-Saharan Africa, the world’s largest rice importing region, where rice is becoming increasingly important to the diet of many lower-income households. Despite projections for near-record global rice supplies in 2019/20, trading prices for rice in mid-April rose to their highest points in more than 7 years after several major exporting countries imposed export bans and restrictions in March as a response to heightened concerns over domestic food security following the outbreak of COVID-19. The rapid increase in global prices occurred as trade restrictions first announced in March in Southeast Asia sharply reduced global exportable supplies. The reduction in the already-small number of rice suppliers immediately affected global prices, including those from the United States, a major rice exporter. U.S. prices, which were already well above competitors’ levels, increased 10 percent in mid-April from late February. Over the same time period, price quotes for Thailand’s exported rice had increased 32 percent, and Vietnam’s had increased almost 25 percent. Apart from export restrictions, temporary mandatory lockdowns in two major rice-exporting nations, India and Pakistan, hindered the movement of rice to the port for export, and further reduced exportable supplies. During the first two weeks of May, Thailand’s prices dropped slightly while the United States’ and Vietnam’s prices remained unchanged. The amount of rice traded globally is currently projected to decline more than 1 percent in 2020 from the previous year and then increase 5 percent in 2021. This chart is based on the May 2020 Rice Outlook.
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