Food inflation fears send Thai rice exports to four-year high

Bloomberg

Thailand, the world’s biggest rice exporter after India, is on track to ship the highest volume in four years as importing countries boost purchases to replenish stockpiles and keep a lid on food inflation.
Exports will probably climb to 8 million tons this year as a weak currency boosts competitiveness and countries such as China look to rebuild inventories before the Lunar New Year holidays, said Chookiat Ophaswongse, honorary president of Thai Rice Exporters Association. Shipments could hold at a similar level through next year, he said.
Prices of essential foods such as wheat and cooking oils hit a record this year after Russia’s invasion of Ukraine throttled Black Sea supplies. That sparked a wave of food protectionism as governments curbed exports to cool prices. One country to do this was top rice shipper India, opening the door for Thailand.
Rice is a staple for half the world, and while wheat soared to its highest ever in March, rice was relatively subdued, helping to constrain food inflation in Asia. People in some countries, such as Indonesia, may have shifted away from expensive wheat to cheaper rice in a bid to keep food costs under control.
Benchmark rice in Asia hit a high this year of $468 a ton in May and a low of $410 in July. Those prices compare with more than $1,000 a ton during a food crisis in 2008, according to data from the Thai Rice Exporters Association.
Thailand benefited this year from India’s move to limit shipments, and also from Iraq’s return to the market, Chookiat said in an interview. Thailand’s strong rice exports reflected global food security fears, and lower production in top growers like India, which accounts for almost 40% of international trade.
“Countries have been importing more rice to build stockpiles and keep domestic prices down,” Chookiat said.