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Global weather forecast pushes rice markets higher

An ag economist says rice traders are reacting to the weather forecast in southeast Asia.

Alvaro Durand- Morat with the University of Arkansas tells Brownfield the El Nino weather pattern could weaken monsoon season in that region and potentially threaten the rice crop, which prompted India, the world’s largest rice exporter to halt exports of basmati rice earlier this month.

“International prices went up significantly, more than $100 per metric ton for Thai rice and Viet rice over the last three weeks.”

He says right now, reaction is based on the potential for less precipitation, but he doesn’t think below average rainfall will have a drastic impact on production.

“We still expect India to produce 130 million to 132 million metric tons of rice. That would be the second largest production on record for India.”

But he says if weather does take a major toll on India’s crop and the export ban remains, prices will continue to rise.

“Most of the rice in the northern hemisphere has been planted already, so there are very few countries that can really improve production, either to take advantage of the higher prices or to protect from these higher prices.”

He says while US producers could benefit from higher prices, global food security could be threatened since rice is a staple in many diets around the globe.

Audio: Interview with Alvaro Durand-Morat

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