Monsoons, typhoons and drought in Asia this year ruined rice crops, but it appears that rice stocks are little affected. The governments of several major rice exporters have abundant supplies.
Super-Typhoon Megi barreled its way across the northern Philippines last week, raising fears in an area that supplies a significant portion of the country's rice harvest. The typhoon, with 225 kilometer winds, ruined several crops including rice, corn and other vegetables.
The Philippine Agriculture Department says the country lost $195 million worth of crops. But just 5 percent of the rice crop was affected. Agriculture Assistant Secretary Salvador Salacup says by the time Megi struck, 90 percent of the crop had already been harvested.
"The stock level for the National Food Authority is around 52 days," said Salacup. "So for the rest of the year we have a stable and practically- we have the supplies for our basic rice needs."
Domestically grown rice does not feed the whole country, which is the world's largest rice importer. But right now, the Philippines is flush with stocks from last year's big order to cover losses from two powerful typhoons. Officials say there are no plans to buy more.
Still, rice prices are expected to rise. One of the world's biggest rice exporters is Thailand. Two leading rice mill associations there project supply losses of 10 to 20 percent because of recent floods. Before the rainy season floods, both Thailand and Cambodia, another exporter, had expected to see smaller crops because of drought.
And in another big exporter, Pakistan, massive floods cut the crop by 40 percent. Add to this the rising price of wheat, which may push consumers to switch to rice, and economists expect a bump in the price of rice.
But International Rice Research Institute Economist Samarendu Mohanty says it will not be a significant increase.
"Still I think the market is still not going to react much because right now there is some rice out there to be sold," Mohanty said. "I attended a conference in Phuket [Thailand] last week and all the sellers and all the exports I'm talking with- they say there are not much buyers right now in the market."
Cause and effect
Mohanty says the main reason is that India has 21 million tons of rice stocked up. He says even if it currently has a ban on exporting non-basmati breeds of rice, India, which supplies most of the rice to east Africa and the Middle East, continues to sell to other governments.
"So, if Bangladesh wants to buy some rice, they will buy it through the Indian government. They will not enter the marke," Mohanty said. "They will have a secret deal with India and purchase the rice from them, at some sort of fixed price."
Mohanty says even the Thai government has plenty of stock. Last week, the price of Thai rice, which sets the world's benchmark, was listed at $551 a ton. That is about 20 percent higher than the July price, but well under record prices of more than $1,000 a ton two years ago.
For now, Mohanty says, government restrictions are keeping the market tight, rather than the weather. He says as long as governments hoard rice and make deals among themselves, the price will continue to increase.