Rice soars to two-year high in Asia on El Niño drought risks

RICE prices in Asia have surged to the highest level in more than two years as importers build up stockpiles on fears that the onset of El Niño will parch plantations and damage crops.

A benchmark grade in the region, Thai white rice 5 percent broken, has climbed about 15 percent in the past four months to $535 a ton, the strongest since early March 2021, according to data from the Thai Rice Exporters Association.

El Niño conditions have developed in the tropical Pacific for the first time in seven years, according to the World Meteorological Organization, threatening to bring drought to Southeast Asia. That comes just as three days of record global temperatures last week increased concerns over the pace of climate change.

While monsoon rains have brought relief to rice fields in parts of India, the top exporter, dry weather is threatening crops in No. 2 shipper Thailand, with the country facing widespread drought conditions from early 2024. The government has already asked farmers to restrict their planting to just one crop this year.

“With El Niño, we’ll start to clearly see the effects of dry weather later around September and October,” said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association.

“This being said, we’ll see stockpiling continue as El Niño looks set to drag on into next year.”

Indonesian purchases

IMPORTERS have started building inventories at aggressive rates. Vietnam expects rice exports this year to climb to the highest in about a decade, with shipments surging to buyers in the Philippines, China and Indonesia.

“The large buying from Indonesia and Philippines has pushed the market higher,” said Jeremy Zwinger, founder and chief executive officer of research firm The Rice Trader. Still, “weakness will return in the new year or even the fourth quarter, unless politics or weather changes direction.”

Global rice supplies remain exceptionally large, Zwinger said. While the world’s year-ending stockpiles have dropped for two years, they are coming off a record high, according to data from the US Department of Agriculture.

Heat waves are likely to persist in many areas of southern China in the next few days, with temperatures rising as high as 40C in parts of Hunan and Jiangxi, top rice-growing provinces, according to the China Meteorological Administration. There’s a “high risk” that heat will force the premature ripening of some rice in these areas, it said.

India food prices

SPIRALING prices of tomato, onion and pulses are emerging as new risks for India’s retail inflation, reaffirming expectations of a hawkish hold from the central bank for the rest of the year.

After moderating for four months, consumer price inflation probably accelerated to 4.6 percent in June, according to a Bloomberg survey of economists. That compares with a 25-month low reading of 4.25 percent in May. Official data is due 5:30 p.m. local time Wednesday.

The gains are broadly in line with the Reserve Bank of India’s projections, but an impact on supply chains and crops due to an erratic weather may fan the prices further.

That means the central bank will take longer to reach the mid-point of its 2 percent-6 percent target, delaying a pivot to rate cut to support growth. It left the rates unchanged in the last two meetings to see the impact of past hikes on inflation.

High borrowing costs may further dent demand in Asia’s third-largest economy where growth has lost pace tracking a global slowdown. It may also pause the rally in India’s stocks which have touched record highs, according to some market watchers.

Economists are crunching numbers to gauge the impact of the sharp acceleration in food prices on headline inflation in the coming months.

A jump of more than 400 percent in the prices of tomato since the start of the year will likely push up inflation beyond the RBI’s target ceiling in the July reading due next month.

“The weather-related price disruption has also been seen in other vegetables and most notably in onion prices,” said Anubhuti Sahay, an economist with Standard Chartered Bank. She sees the risk of inflation touching 6 percent in July if the increase in food prices is sustained. Bloomberg News

Editorial

Halfway to 2030, 17 SDGs in peril

ADopteD by all United Nations member states in 2015, “the 2030 Agenda for Sustainable Development” provides a shared blueprint for peace and prosperity for people and the planet, now and into the future. At its heart are the 17 Sustainable Development Goals (SDGs), which are urgent calls for action by all countries—developed and developing—in a global partnership. they recognize that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth—all while tackling climate change and working to preserve our oceans and forests.

“Leave no one behind” was the defining principle of the 2030 Agenda for Sustainable Development, a shared promise by every country to work together to secure the rights and well being of everyone on a healthy, thriving planet. But halfway to 2030, that promise is in peril.

A new UN report—The Sustainable Development Goals Report 2023: Special Edition— shows we are leaving more than half the world behind. The report said under current trends, 575 million people will still be living in extreme poverty in 2030, and only about one third of countries will meet the target to halve national poverty levels.

In education, the impacts of years of underinvestment and learning losses are such that, by 2030, some 84 million children will be out of school and 300 million children or young people attending school will leave unable to read and write. If things don’t change, the report said it will take 286 years to reach equality between men and women.

“Progress on more than 50 percent of SDG targets is weak and insufficient; on 30 percent, it has stalled or gone into reverse. These include key targets on poverty, hunger and climate. Unless we act now, the 2030 Agenda could become an epitaph for a world that might have been,” UN Secretary-General Antonio Guterres said in a foreword to the report.

“Developing countries are bearing the brunt of our collective failure to invest in the Sustainable Development Goals. Many face a huge financing gap and are buried under a mountain of debt. One in three countries is at high risk of being unable to service their debt,” Guterres said.

“The 2030 Agenda stated that this generation could be the first to succeed in ending poverty—and the last to have a chance of saving the planet. This higher purpose remains within grasp, but it requires an unprecedented effort by individual governments, a renewed sense of common purpose across the international community, and a global alliance for Sustainable Development Goals-related action across business, civil society, science, young people, local authorities and more. It requires that we come together in September to deliver a rescue plan for people and planet,” the UN report said.

“The SDG Summit taking place in September will be a critical moment for member states to galvanize efforts and renew their commitment to the SDGs. It will also be an opportunity for all of us—citizens, civil society, the private sector and other stakeholders—to advocate for urgency, ambition and action to realize the goals,” said Li Junhua, UN Undersecretary-General for Economic and Social Affairs.

“The SDGs are the universally agreed road map to bridge economic and geopolitical divides, restore trust and rebuild solidarity. Failure to make progress means inequalities will continue to deepen, increasing the risk of a fragmented, two-speed world. No country can afford to see the 2030 Agenda fail,” Guterres said, adding that “this report sounds the alarm, calling for a Rescue Plan for People and Planet. I hope the SDG Summit in September will agree to back this Rescue Plan, based on a global alliance for SDG action and acceleration by all stakeholders.”

“We are at a moment of truth and reckoning,” the UN chief said, “but together, we can make this a moment of hope. I urge all member states to make 2023 the moment when we jump-start progress on the SDGs, to create a more peaceful and prosperous future for all.”