According to livemint.com, rice production across several parts of Asia is under threat as fertilizer costs soar at a time when global demand is also surging — posing potential risks to food security and efforts to control inflation.
Declining Yields Amid Soaring Fertilizer Prices
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A research unit under Kasikornbank Pcl, one of Thailand’s leading banks, reported that rice yields could decline in Thailand — the world’s second-largest rice exporter — due to rising fertilizer prices.
Meanwhile, in the Philippines, the world’s second-largest rice importer, lower domestic harvests could force the country to increase rice imports. China is grappling with pest infestations threatening crops, while India’s rice output remains heavily dependent on monsoon rainfall.
As Asia both produces and consumes most of the world’s rice, any disruptions here have serious implications for regional economic stability.
Market Uncertainty and Historical Parallels
Unlike wheat and corn — which saw prices soar following Russia’s military operation in Ukraine — rice prices have fallen in recent months. However, there is no guarantee this trend will continue.
Back in 2008, rice prices spiked above USD 1,000 per ton, doubling current levels, as global panic over supply shortages swept the market.
Although wheat, corn, and vegetable oils have seen weaker profits this year due to improved supply prospects, agriculture remains highly vulnerable to weather fluctuations, which are becoming increasingly erratic under climate change.
Any sharp rise in wheat or corn prices could again trigger higher demand for rice as an alternative for both human consumption and animal feed.
India’s Crucial Role in the Global Rice Supply
India accounts for about 40% of global rice exports. According to V. Subramanian, Vice President of The Rice Trader,
“Global rice supply is at risk, though for now we still have substantial exports coming from India, which are currently being offered at lower prices.”
India has already restricted wheat exports to protect domestic food security, prompting concerns that rice could be next on the list — though this depends largely on monsoon rainfall and crop output. So far, rainfall has been normal, allowing exports to continue.
India’s shipments are currently helping stabilize regional supply. However, Kasikorn Research Center in Thailand warned that record-high fertilizer prices are hurting Thai farmers, and reduced fertilizer use could lower yields just as global demand for rice is increasing.
Rising Costs Pressure Farmers and Consumers
In the Philippines, rice output is also projected to decline this year due to expensive fertilizer. The government is increasingly concerned about rising food inflation, particularly rice prices — which account for around 16% of household spending among low-income families.
China, the world’s largest rice producer, has warned of a higher pest incidence this season, with some provinces reporting a nearly 10% increase in affected areas.
India’s Influence on Global Rice Prices
Mr. Subramanian of The Rice Trader emphasized that:
“At present, India is the key player influencing global rice prices, as it remains the largest exporter in the market.”
In summary, Asia’s rice industry — the backbone of global food supply — is under mounting strain from rising input costs, climate volatility, and pest threats. With India, Thailand, China, and the Philippines all facing distinct challenges, the region’s ability to maintain stable rice production will be crucial for global food security in the months ahead.