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Rice Prices to Surge 15% Amid Global Shortage
29 Sep
Summary
- Global rice production may fall 9%, increasing import needs by 14%.
- India's government holds 48 million tonnes of wheat stocks.
- Pulses prices could increase by 4-5% due to import supplies.
Global rice prices are poised for further gains, with Vice President of the India Rice Exporters Federation, Dev Garg, forecasting an increase of 10-15% from current levels. This projection stems from an expected 9% fall in global rice production and a corresponding 14% rise in worldwide import requirements, indicating a widening demand-supply gap.
India's own rice production estimate has been revised downward to approximately 146 million metric tonnes. However, domestic supply is not expected to be an issue, with Food Corporation of India holding about 27 million tonnes. Rice exports are projected to remain steady at 22-23 million tonnes, with higher international prices potentially boosting export earnings.
In contrast, the wheat market shows stability. Ajay Goyal, Chairman of the Wheat Products Promotion Society, stated that India possesses around 48 million tonnes of government wheat stocks, a significant increase from the previous year. Wheat prices in Delhi are expected to trade within a narrow range of ₹2,925-2,980 per quintal, with government interventions likely if prices exceed ₹3,000.
For pulses, a more moderate price increase of 4-5% is anticipated, according to Bimal Kothari, Chairman of IGPA. Adequate supplies from overseas markets and substantial government stocks of over 3 million tonnes are expected to limit sharp price hikes. The arrival of yellow peas in the coming months could also serve as a substitute, further moderating price increases.
