Rice Market Prices Surge to an All-time High as Coronavirus Sparks Stockpiling

Rice and wheat crops account for about one-third of the world's calories.

 

As the Covid-19 pandemic outspreads more rigorously into the global supply chain, prices for key staple foods are starting to soar in most parts of the world. Rice and wheat, being the common staples of India, have been climbing up the food chain swiftly. And, for countries that rely only on imports, this is posing as an added financial burden that is the result of the Coronavirus pandemic. 

 

In Nigeria, for instance, the cost of rice has taken a hike by more than 30% in the month of March alone. It's still unclear what the biggest drivers are for such price surges, whether it was the effect of panic-buying or the trickle-down effect from local logistical choke points. But, what is apparent is that while the world isn't about to run out of food anytime soon, the policymakers are going crazy trying to deliver it to the right place, at the right time, and certainly, at the right price.

 

Revenue Growth For Indian Basmati Rice Amid Covid-19

 

The revenue growth prospects of the Indian basmati rice have weakened since the Coronavirus outbreak, ensuing prolonged lockdown and transport barriers all across the nation. Iran, one of the largest importer of Indian Basmati rice, has added to the woes of the rice industry. With the virus still spreading rapidly, key export destinations have been cut-off due to logistical constraints, businesses are expected to shut down, which means a hike in the golden rice prices.

 

Rice Market Price Takes a Hike

 

In the past week itself, the rate of a bag of rice, be it jeera rice price or golden rice, wheat flour, pulses, sugar have risen by almost 5-10%. Even after the markets for food grains are still open, the demand has suddenly taken a dip, due to the sudden surge in golden rice prices.

 

Reasons for Higher Rice Market Price

 

The Covid-19 crisis has changed the world completely in the last few months. Everyone has been locked into their homes, economic activity has come to a near standstill, and everyone has been impacted. Considering the current situation, the biggest reason for this spike in prices is due to the Coronavirus outbreak. But, other reasons also include panic-buying, costlier freight, and lack of packaging and storing facilities. 

 

Before the lockdown situation, the freight was Rs. 150 per quintal, that now taken a jump to Rs. 250 per quintal. People are storing food grains due to extended lockdown. Rice market prices in India have reached a 7-year high. According to the REA (Rice Export Association), the price of rice has increased over 12% between March and April and will continue to rise. Rice prices today, are at the highest since 2013 and despite adequate supply, rice market prices are rising. Considering these changes alone, it wouldn't be erroneous to say that the rice market prices are at an all-time high.

 

• Disrupted Supply Chains

 

As the fear of lockdown being extended gets stronger, rice market prices are expected to move up. With lower averages and revenue, the biggest hit is being taken by the rice manufacturers. Struggling to distribute enough supply to local distributors and Kirana stores, the rice manufacturer's are tussling to stay afloat. 

 

• There are Going to Be More Problems Due to Sowing Season

 

It is evident that rice manufacturers have been adversely affected by the lockdown. But, apart from the lockdown period, its timing is having more effect because, if the cultivation is not done for rice crops this season, the rice manufacturers will not be able to crop throughout the year.

 

• Exporters are Not Taking New Contracts

 

Asia manufactures 90% of rice supplies in the world. 

 

India's rice traders are not taking any more contracts for exports because of the lockdown of international boundaries. On the other hand, the Vietnam government has reduced the number of exports for the coming years. So, yes, the entire rice industry is taking a big hit, but the rice manufacturers are the ones at the bottom line of the food chain, which means they are the ones being hit the most.

 

Bottom Line

 

The labour is not available for agriculture, and inflation will be higher this year. Not only rice, but other food grain prices have also gone up worldwide. Analysts say that wheat and rice market prices will continue to rise in the coming days. All we can request to the traders is to:-

 

Sell it at the Rice Price.