According to the USDA, EU rice production for the 2021/22 marketing year (MY) is being adjusted downwards based on a smaller crop estimate for Italy, the largest rice producer in the EU. EU production is expected at 1.7m tonnes in 2021/22, down 5.9% year-on-year (y-o-y). The decline in production is due to a severe precipitation deficit in northern Italy that started in March 2022. The water availability for irrigation was lower than usual, as the Po River (the main source of water for agricultural farms) and its main tributaries were already at very low levels. According to the Italian National Research Council, there has been half the amount of rain this year compared to the average in the last three decades and 60% less in northern regions. Hence, marginal rice areas (i.e., less productive areas) were not planted under the given conditions.
The drought in northern Italy has continued in recent months, and on the 4th of July 2022, the government declared a state of emergency in five northern Italian regions until the end of this year. The combination of adverse weather and high production costs (fertilisers, transportation) caused Italian rice prices to increase to EUR 1,903/MT on the 1st of July 2022, up 17% since March and 97% y-o-y.
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