REUTERS, Mumbai

Global rice prices, now at their highest in 11 years, are set to rally further after India moved to boost payments to farmers, just as El Nino threatens yields in key producers and alternative staples get costlier for poor Asians and Africans.

India accounts for more than 40 per cent of world rice exports, which were 56 million tonnes in 2022, but low inventories mean any cut in shipments will fuel food prices driven up by Russia’s invasion of Ukraine last year and erratic weather.

“India was the cheapest supplier of rice,” BV Krishna Rao, president of the Rice Exporters Association (REA), told Reuters. “As Indian prices moved up because of the new minimum support price, other suppliers also started raising prices.”

Rice is a staple for more than 3 billion people and nearly 90 per cent of the water-intensive crop is produced in Asia, where the El Nino weather pattern usually brings lower rainfall.

Yet even before the weather phenomenon can disrupt production, the global rice price index of the Food and Agriculture Organization hovers above an 11-year high.

That comes despite a forecast by the US Department of Agriculture (USDA) for near-record output in all top six global producers — Bangladesh, China, India, Indonesia, Thailand and Vietnam.

“The impact of El Nino is not restricted to any single country; it affects rice output in almost all producing countries,” said Nitin Gupta, vice president of Olam India’s rice business.