Asia's Decreasing Rice Output Threatens Food Security

Farmers remove grain from the stalks at a ricefield in Java, Indonesia, durng the harvest season.

Kuala Lumpur, 04 Sya’ban 1437/12 May 2016 (MINA) – Nearly a decade after a spike in global food prices sent shockwaves around the world, Asia’s top rice producers are suffering from a blistering drought that threatens to cut output and boost prices of a staple for half of the world’s population.

World rice production is expected to decline for the first time this year since 2010, as failing rains linked to an El Nino weather pattern cut down crop yields in Asia’s rice bowl, Mi’raj Islamic News Agency (MINA) reported, quoting VNA.

A heat wave is sweeping the top rice exporter India, while the second largest supplier Thailand, is facing a second year of drought.

Swathes of farmland in Vietnam, the third-biggest supplier, are also parched as irrigation fed by the Mekong River runs dry.

The three account for more than 60 per cent of the global rice trade.

James Fell, an economist at the International Grains Council (IGC) said there has been no a large price reaction to hot and dry weather thanks to surplus stocks in India and Thailand.

But that can’t last forever.

Rice inventories in the three top exporters are set to fall to 19 million tonnes at the end of 2016, the biggest year-on-year drop since 2003, according to Reuters calculations based on US Department of Agriculture data.

According to Bruce Tolentino of the Philippines-based International Rice Research Institute, in general prices are still stable right now.

They’re inching up though, and what will drive things over the edge will be a major calamity in one of the major producing countries, he said.

Although India’s rice output in 2015 was largely stable, extremely hot temperatures are threatening a second crop in India.

Traders see further price gains by June as India’s next big crop is not due until September and Thailand’s main crop by year end.

The IGC sees a 2016 world harvest of 473 million tonnes, down from 479 million tonnes in 2015 and the first decline in six years.

Thailand’s last main crop was only about half of the peak production a few years ago and the USDA has forecast output will drop by more than a fifth to 15.8 million tonnes this year.

Thai farmers were asked not to plant rice as there is little water in the reservoirs after two years of drought.

In Vietnam, output could fall 1.5 per cent this year to 44.5 million tonnes, while exports would be 8.7 million tonnes.

As much as 240,000 hectares of paddy have been destroyed by drought and salination in the central area and southern Mekong Delta region.

Against the backdrop, some Asian countries are already looking to raise imports.

Indonesia is expected to see 2016 purchases jump by more than 60 per cent to two million tonnes from a few years ago. (T/R07/R01)

Mi’raj Islamic News Agency (MINA)