Inevitable rice deficit in 2023

Rice, a major determinant of food price inflation and food security in the world, is estimated to log a deficit in 2023 

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The world is likely to feel the pinch of rice shortage in 2023. According to a forecast by the New York-based research firm – Fitch Solutions, the shortfall of rice across the world would be about 8.7 million tonnes in 2022-23. This would be the highest rice deficit since the one recorded in 2003-04, which stood at 18.6 million tonnes. 

The global shortage of rice, one of the most consumed food grains in the world, is spurred by various factors including the supply strains due to the Russia-Ukraine war, the intense heat and drought in China that significantly affected the country’s rice harvest last year, and the floods in Pakistan last year that caused a total crop loss. In addition, year-on-year low rice production recorded in countries like the U.S. and EU has further contributed to the global rice deficit.

India also decided to ban the export of broken rice in September last year. Charles Hart, Commodities Analyst at Fitch Solutions noted, “The global rice export market, which is typically tighter than that of the other major grains … has been affected by India’s export restriction.”

Global rice production deficit will lead to an increase in the cost of importing rice for major rice importers like Indonesia, Philippines, Malaysia, and African countries. 

The global rice market, however, is expected to regain a balanced position in 2023-24 and could record a “surplus” in 2024-25.