Having reached its highest level in a decade, will rice prices still increase by 20% in the near future?

2023 marked the year when rice prices reached their highest level in over 10 years. In the Indian market, fresh paddy rice was purchased at a 7% increase compared to normal prices and remained at 6,200 VND. In Vietnam, paddy rice prices also remained stable at 6,600 – 7,000 VND depending on the variety.

1. Causes of rising rice prices

1.1. The weather conditions are unfavorable for farming.

According to the scientific definition, El Niño is a natural, temporary, and infrequent warming phenomenon of a part of the Pacific Ocean that alters global weather patterns. However, climate change is making this phenomenon more extreme than ever before.

The El Niño phenomenon is causing droughts in Asia – the world’s rice granary. This has led to a decrease in rice production in major exporting countries such as India, Thailand, and Vietnam. The reduced supply naturally leads to an increase in rice prices.

The El Niño phenomenon causes extreme weather and affects agricultural production.

1.2. World situation

The conflict between Russia and Ukraine has led to many repercussions. Besides the difficulties facing the fertilizer market, the agricultural sector, particularly the rice industry, is no exception.

To ensure food security in the face of war, some countries restricted rice exports while demand was overwhelming.

In addition, in India, the government raises procurement prices as a way to attract farmers’ votes in state and general elections.

2. The future of rice prices worldwide

Faced with extreme weather conditions, Thailand urged farmers to plant only one rice crop after May rainfall was 26% lower than normal. India was no exception, with the area planted for the summer-autumn crop decreasing by 26% compared to the same period a year earlier.

Therefore, rice industry experts in New Delhi predict that rice prices will increase by 20% or more in the near future.

In addition, other agricultural products such as eggs and dairy are also on the rise in price. Specifically, in recent months, the prices of sugar, meat, and eggs have risen to their highest levels in years worldwide, after producers cut exports to curb domestic inflation.

Above is news and some predictions about rice prices in the near future. We invite farmers to refer to this information and make appropriate farming choices to achieve high yields and good prices!