IRRI warns of another rice shortage

The combined stock of milled rice held by the world’s top five exporters has gone down to the bare minimum and the monsoon season setting in could push the world market toward another supply shortage like in 2007 and 2008.

Samerandu Mohanty, head of the International Rice Research Institute’s social science division, Tuesday said the inventory of India, Thailand, Vietnam, Pakistan and United States “can’t go down further.”

Mohanty said the coming rainy season—and especially the possible onset of La Niña—would test the mettle of these exporters.

“Right now, these countries were not restricting exports, they seemed to have learned their lesson,” he said, referring to the cause of the shortage that caused a price spike almost a decade ago.

Mohanty recalled India and Vietnam restricting exports back then as stocks declined. This caused prices to skyrocket as importers like the Philippines scrambled to secure supplies.

“While current supplies were still enough, we could not afford any more crop losses after losses due to El Niño,” he said. “The exporters could panic again, which would bring us back to a shortage crisis.”

Citing data from the United States Department of Agriculture, Mohanty said the top five exporters’ combined inventory peaked at about 41 million tons in 2013.

However, USDA data showed the stock might shrink this year by 40 percent to 19 million tons from 32 million tons in 2015. This would mean the tightest supply situation since the crisis of 2007-2008.

According to the IRRI, addressing a repeat crisis required joint action among the different countries, particularly the Asean+3 (the Philippines included) and India.