Following an announcement by India that it would begin restricting shipments of rice, rice prices have surged to their highest levels in nearly 15 years as concerns over global supplies grow. Adding to those concerns are fears that bad weather in Southeast Asia could impact harvests, further impacting global supplies.

Asian benchmark Thai white 5% broken rice has increased in price by $648 per ton, the highest level it has seen since October of 2008, according to data from the Thai Rice Exporters Association.

The surge follows the announcement by top exporter India, which has announced it was imposing restrictions on non-basmati white rice in July. The Indian government said it was imposing the restrictions to try and assuage concerns domestically to contain price spikes in the staple, after a price surge of over 30% since October 2022. However the importance of rice to the diets of billions throughout Asia and Africa has caused the announcement to spark concerns for the state of the global market.

In addition, in Thailand, the world’s second largest exporter of rice to the global market, the onset of El Nino and the drier conditions which it triggers, has led authorities to advise farmers to switch to crops which are less water intensive. El Nino traditionally reduces rainfall all throughout Southeast Asia, affecting crop outputs, as well as the choice of crops farmers select to grow.

In the 2015/16 crop year, a previous El Nino reduced the acreage devoted to rice by farmers in Thailand, and cut the rice output by 16% year over year. So far this year, total rainfall has been 23% below levels from last year, according to the Gro database, although it is still not too far from the 10-year average.

According to Charoen Laothamatas, president of the Thai Rice Exporters Association, Thailand supplied 4.8 million metric tons of rice to the global market in the first seven months of 2023, with its monthly exports running between 700,000 and 800,000 tons. Last year, the country’s rice exports came in at 7.71 million tons.

In a press briefing last week, Laothamatas said, “The world market is very turbulent because of speculation in every market, affecting countries that do not have stocks in hand.”