Recent adverse weather conditions across key rice suppliers in Asia have caused supply concerns for the 2022 rice crop. According to the market sources, a heatwave in India and China, and floods in Bangladesh and Vietnam could lead to quality downgrades and curb yields in four of the world's top rice producers.
In India’s top rice-producing states, adverse weather has already decreased rice planting for this season, and according to market sources, this could result in Indian production to fall by 10-12m tonnes. Prior to the heatwave, India’s rice production for the 2022/23 season was estimated to reach a record high of 130.5m tonnes. However, with a possible decline in output, it would still be the second highest on the record. As of the 3rd of August 2022, India’s 5% broken white rice price was at USD 355/MT, flat week-on-week (w-o-w) and month-on-month (m-o-m).
Also, China (accounting for 29% of the global rice supply) has suffered yield losses from extreme temperatures in key rice-growing areas. According to the USDA, Chinese rice imports are estimated to increase to 6m tonnes in 2022/23, up 1.7% year-on-year (y-o-y). At the same time, the main rice-growing regions in Bangladesh are experiencing flood damage and quality downgrades for the 2022/23 crop.
Similarly, in Vietnam, in the Dak Lak district (accounting for 35% of the province’s annual crop area), more than 2,200 hectares of rice in the 2022/23 summer-autumn crop are flooded due to excessive rainfall that caused the water level of the Krong Na river to rise. Dak Lak's rice production ranks first in the Central Highlands region and is of higher yield and better quality than those grown in the delta. According to the Lak district's Department of Agriculture and Rural Development, the district has an estimated loss of almost USD 3 million of agricultural production.