Prices of a vital food, rice, surged to a fresh 15-year high

Rice prices surged to a fresh 15-year high, fueled by strong demand and lingering supply concerns. Thai white rice 5% broken — an Asian benchmark — climbed for a third straight week to reach $659 a ton on Wednesday, according to the Thai Rice Exporters Association. That’s the highest since October 2008 and brings the increase in prices to about 38% this year, after top shipper India restricted exports and dry weather threatened production.

Rice is vital to the diets of billions of people in Asia and Africa, and the latest run up in prices could fan inflationary pressures and hike import bills for buyers. Some nations have been ramping up purchases to build sufficient stockpiles amid fears that the impact of El Niño will further tighten supplies in the coming months.

Indonesian President Joko Widodo said last week that Thailand will deliver as much as 2 million tons next year, while India has agreed to supply 1 million tons. Meanwhile, the Philippines is set to receive more than 500,000 tons of rice imported by the private sector through February.

This article has been republished from The Financial Express.