India’s rice export ban to push up food prices
MANILA -Amid the threat of the El Niño dry spell on Philippine agricultural output, India’s recent decision to ban rice exports is expected to put more upward pressure on international food prices.
Fitch group subsidiary BMI said in a commentary that New Delhi’s July 20 decision to introduce an immediate ban on the export of non-basmati white rice would have “substantial ramifications” for trends in the global rice market.
“At present, we have not revised our average rice price forecast for 2023 but we consider this latest development to have concentrated risks to our forecast even more firmly to the upside than was previously the case,” BMI said.
The global data and research firm earlier said international prices of rice have been easing but they remain high and may see an uptick later this year or early next year as the peak of the El Niño approaches.
BMI also said that based on five occurrences of “severe” El Niño since the 1990s, rice production in the Philippines was one of the worst-hit in Asia whenever the climate phenomenon hits overdrive.
The 2015 to 2016 El Niño was considered as one of the worst in recorded history and, during that time, BMI noted that rice production in the Philippines was 10 percent below the average annual output.
“The global rice market remains tight by recent historical norms, which the Indian ban will exacerbate,” BMI said in its latest commentary.
“In conjunction with the supply-side risks associated with El Niño, we expect the export ban to keep upside pressure on prices,” it added.
More typhoons
Meanwhile, Moody’s subsidiary Risk Management Solutions (RMS) said more typhoons in the Western Pacific basin — the area that includes the Philippines — would see more typhoons this year due to El Niño.
Moody’s RMS said that during El Niño years, weaker trade winds and increased atmospheric instability typically lead to increased overall activity or more typhoons forming in the Western Pacific.
Earlier this month, the latest update from the American agency Climate Prediction lent more certainty to the persistence of upward pressure on food prices in the Philippines.
The Climate Prediction Center (CPC) said there’s a 90-percent chance that El Niño would prevail through the Northern Hemisphere winter — December to February — and cited a significant probability of becoming a severe occurrence.
The CPC said that while data in June indicated a “weak” El Niño, there’s a one-in-five chance of “an event that becomes ‘historically strong,” rivaling the (occurrences during the) winters of 1997 to 1998 or 2015 to 2016.”
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