On November 7 with U.S. rice futures at 16.75 we posted:
Commodities: Something's Up With Rice
Both charts via FinViz (also on blogroll at right). 893 and 16.75 respectively.
Starting late last year there's been a shortage of rice in The Philippines and in parts of Africa.
Then the world's largest exporter, India, halted shipments, although they've recently allowed some exports to foreign customers who had financing in place in September when the export ban was announced.
Sri Lanka's production is a basket case due to a lack of fertilizer, something their great organic adventure did not help and may have caused.
On the other hand the U.N.'s Food and Agriculture Organization (November 4) is looking for 2023 production to be flat but....
On the third hand the International Monetary Fund's quarterly Finance & Development journal interviewed the FAO's Chief Economist and published under the headline:
A Looming Food CrisisFAO’s Maximo Torero Cullen discusses how global food supply difficulties could tip into a full-blown catastrophe
.... MTC: If the war continues, in 2022 and 2023 we could potentially have a food access problem coupled with a food availability problem, because Ukraine and Russia would significantly reduce their exports, including fertilizers. This is a situation we have to avoid. Under the current conditions, we estimate Ukraine could reduce their exports of wheat and maize by around 40 percent, and Russia might do something similar.
We are also observing that, because of the increase in the cost of fertilizers, rice production has been affected for next year, and prices are starting to rise. In addition, a poor monsoon season is potentially affecting rice sowing in India. These developments pose risks because rice is a key staple around the world, including in sub-Saharan Africa.
If I had a say in which countries should have access to fertilizers, the key exporters of rice would be a priority, because they will supply the rice we need to minimize food access problems in the next year....
Unfortunately, American rice futures, chart above, are a very thin market, the largest open interest is in the January 2023 contract, 6000 total.
And should India lift the export ban, even with flat production prices would tumble, which is why we have the "on the other hand" type of post.
*****
Well, wheat definitely broke the series of higher highs/higher lows, and now, with U.S. rice futures having settled at 18.26 on Friday, we see at ZeroHedge :
Friday, Jan 27, 2023 - 09:45 PMThai Rice Prices Jump As Global Food Crisis Reignites
Soaring rice prices is the latest example of persistent food inflation. The grain is responsible for feeding billions of people, and prices were relatively stable last year while wheat soared until now.
Since November, Thailand's white rice prices jumped to two-year highs, up 23% to $523 per ton.
I don't know about "global food crisis" (yet) but something is going on in rice markets.
