Africa fears a rise in the price of rice

Published on : 12/09/2022 – 14:10

Floods in Pakistan that have drowned part of the farmland and India’s decision to limit its rice exports could aggravate tensions on the food security front in the African countries most dependent on imports from Asia .

Already facing soaring wheat and maize prices due to the war in Ukraine, the African continent may also face increased market prices for rice due to the floods in Pakistan and the decision of the India to limit its exports.

India banned broken rice exports last week and imposed a 20% duty on exports of top grades of rice. With this measure, the world’s largest exporter seeks to lower prices at the local level after below-average monsoon rains.

Exports could thus collapse by 25% in the coming months, according to the director of Satyam Balajee, the main Indian rice exporter. “All cereals had increased, except rice. Now it will join this trend,” said Himanshu Agarwal, interviewed by Reuters.

At the same time, Thailand and Vietnam have agreed to raise prices to better remunerate their farmers. “There are going to be significant tensions over food security in many countries,” said Phin Ziebell, food economist at National Australia Bank.

Asian rice addiction

Especially since the situation in Pakistan, faced with the consequences of historic floods, could also weigh on world prices. “Pakistan is a big exporter of rice. However, a third of the country is under water and therefore there is a long-term risk of an increase in the price of rice on the international market”, note on the antenna of France 24, researcher Nicolas Bricas, holder of the UNESCO World Food Chair.

Finally, strong Chinese demand for broken rice to replace maize which has become too expensive to feed livestock has tended to drive up prices in recent months.

>> To see: Dependent on Ukrainian and Russian cereals, Africa trapped

Another bad news on the food security front in sub-Saharan Africa, which depends very largely on imports of small white grain from Asia. According to RFI, Africa could absorb 40% of world rice trade this year, or 20 million tonnes, a record.

“The problem of this dependence on rice imports is chronic and will last,” explains CIRAD researcher Patricio Mendez del Villar. “Local production is unable to follow the curve of needs which increases with population growth and urban growth. In Africa, rice is preferred by urban dwellers because it is a ready-to-use product unlike traditional cereals like millet and sorghum which require preparation”.

A rise in prices which should remain “contained”

If food security in sub-Saharan Africa is not based solely on rice, it remains the second most consumed cereal after maize. A surge in prices would be a new blow for populations already weakened by the rise in the price of agricultural foodstuffs.

The situation is particularly critical in the Horn of Africa, which is plagued by a historic drought. From southern Ethiopia to northern Kenya via Somalia, more than 22 million people are at risk of hunger, according to the UN.

However, despite these concerns, rice prices are not yet soaring and a price increase should remain “contained” and short-lived, according to Patricio Mendez del Villar.

“The main harvest in the major producing and exporting countries (India, Thailand and Vietnam) will start in a few weeks. All this rice will add to stocks which will be at their maximum, which will push these countries to sell the old harvest to make room. This should ease the pressure on the market. We would be in March or April, that would be much more problematic”, analyzes the specialist in the rice sector.

As for Pakistan, it exports only 4 million tonnes of rice per year against 21 million tonnes for India, “the market should therefore be able to withstand the shock even if Pakistan limits its exports”.