In 2023, the global market for rice could face its biggest shortage in decades, according to industry analysts.
Production of rice is dropping and the industry is expected to experience its largest deficit between supply and demand in 20 years, according to Fitch Solutions, a credit ratings agency recognized by the U.S. Securities and Exchange Commission.
Rice prices have already been high since the start of the COVID-19 pandemic and the expected shortage means prices will likely remain high, CNBC reported.
Falling production in China and Pakistan, as well as in the U.S. and Europe, have meant the supply of rice is shrinking compared to global demand.
Additionally, Putin’s war in Ukraine drastically pushed up the cost of wheat, which in turn has increased demand for grain alternatives like rice, CNBC reported.
Why is there a rice shortage?
Bad weather in rice-producing regions around the world led to a drop in rice production in 2022.
China is the world’s largest producer of rice, while Pakistan produces around 7.6% of the world’s supply, putting it in the top five rice-producing countries, according to the Trade and Development Authority of Pakistan.
The U.S. and EU countries have also seen lower year-over-year rice production, CNBC reported.
In the U.S., the most rice is produced in Arkansas, the Mississippi Delta, the Gulf Coast of Texas and Louisiana, and California’s Sacramento Valley.
Who will be most affected by rice shortages?
Rice is the primary staple food for more than half of the world’s population, according to the Department of Agriculture.
Asia, Sub-Saharan Africa and South America consume the most rice in the world, according to the department.
These countries consumed the most rice from 2019-2022, USDA data shows:
- China
- India
- Bangladesh
- Indonesia
- Vietnam
- Philippines
- Thailand
- Burma
- Japan
- Brazil