“In a few weeks, we have taken another 20 dollars per ton of rice. It’s going quickly, very quickly,” notes Thierry Pouch, chief economist at the French Chambers of Agriculture and associated researcher at the University of Reims-Champagne-Ardenne . The surge in prices, which began this summer after India announced a restriction on its exports, continues. With rice at more than $600 per tonne at the end of January 2024, the price of this raw material, which serves as a basic food for four billion people on earth, is soaring to its highest level in fifteen years, raising fears a global food crisis.
After a first ban on the export of broken rice and a 20% tax on other varieties since September 2022, with the approach of the spring 2024 election, Indian Prime Minister Narenda Modi has decided this time to pass at the upper cape. India has suspended its exports of white rice excluding basmati since July 2023 to favor its national market and avoid a risk of shortage or food inflation. “India’s decision caused nervousness in global markets,” continues Thierry Pouch. Worried about global inflation, the IMF also urged India, in July, to lift its ban. In vain.
Added to the upheaval caused by the Indian decision are fears linked to climatic hazards in South-East Asia. This year again, according to meteorologists, the El Nino phenomenon continues and could cause a drop in precipitation in rice-growing areas, which would have consequences on the yield of rice fields.
The reactions of Thailand and Vietnam closely scrutinized
India is the largest exporter of rice on the planet, accounting for more than 40% of global exports, ahead of Thailand, Vietnam and to a certain extent, Pakistan.
But Thierry Pouch wants to be reassuring: "There would clearly be enough to cover world consumption, taking into account the state of stocks in Vietnam and Thailand. There is, a priori, no risk of food shortage ." However, the economist does not rule out that these two countries may decide to restrict their exports in turn if world prices continue to rise, so that domestic prices remain affordable for Vietnamese and Thai consumers.
The main rice exporting countries in the world © Graphic Studio France Médias Monde
For the moment, Vietnam and Thailand are mainly taking advantage of the Indian crisis to export more of their rice. “You should know that Thailand has even exceeded its export target in 2023. So, the Indian restrictions were experienced as a market opportunity,” comments Anissa Bertin, project manager at the Demeter club and specialist in geopolitical issues, from agriculture and food.
Vietnam and Thailand, whose partners are essentially Asian, are even considering turning to African countries, particularly dependent on Indian rice.
Taking on debt to buy expensive rice
The risk posed by this crisis is not so much a possible shortage as the rise in the high price of rice, which will deprive some of the world's inhabitants of this commodity. “For African countries, if Indian export restrictions continue and if prices continue to soar, it risks being complicated,” says Thierry Pouch.
And all the more so since wheat prices have also exploded with the crisis caused by the war in Ukraine. “For countries that are structurally indebted, the difficulty will be to request a new repayment schedule for their debt, or even to contract new debts to be able to buy agricultural products at high prices.”
However, rice is the main commodity consumed in sub-Saharan Africa, at a rate of 38.8 million tonnes per year. The problem is that the region is particularly dependent on imports. They represent 45% of the rice that its inhabitants consume.
The main rice importing regions in the world. © Graphic studio France Médias Monde
The main destinations for Indian production are Ivory Coast, Senegal, Benin, Niger, Nigeria and Togo, explains Thierry Pouch, specifying that for Guinea and Burkina Faso, between 70% and 80% of the imported rice is Indian.
In this context, several countries including Cameroon, Ivory Coast and Guinea turned to India in October 2023 to negotiate exemptions and were successful. India has agreed to deliver 1.34 million tonnes of rice to these African countries, and several Asian partners.
These negotiations will make it possible to maintain prices at a reasonable level, but only until February. “This shows a certain attentiveness from the Indian government to the needs of Africa. It is not a question of destabilizing the world even more than it is. But this partnership can only cover a small part of the needs over the year – four months. Sub-Saharan Africa represents approximately 18 million tonnes imported per year. We are far from the mark,” argues Thierry Pouch.
Towards new hunger riots?
The issue goes beyond the mere risk of a food crisis. For the researcher, the rise in rice prices could have serious consequences, with the appearance of hunger revolts in countries which are already experiencing a certain form of political instability. Other analysts are in the same direction, fearing that the world will relive the shock wave of the rice crisis of 2008, which was followed by riots in North Africa, South Asia and notably in Haiti, In the Caribbean.
A nuanced scenario by Anissa Bertin. The analyst believes that the context, although serious and serious, is far from being identical: "In 2008, the price of rice had crossed the threshold of 1,000 dollars per tonne. The subprime financial crisis had passed by and it had led to a surge in the price of food materials, considered as safe havens. The United States had decided to invest in bio ethanol because oil prices had increased, then the price of corn had also skyrocketed and so we turned towards other cereals, such as rice.
Russia wins
If new agreements are not found with India, the countries concerned will turn to other sources of supply, such as Vietnam and Thailand, but also consider developing their own production. “Africa already produces nearly 55% to 60% of its rice consumption, mainly in Nigeria, but also in Guinea, Mali, Ivory Coast and Senegal,” recalls Anissa Bertin.
See alsoThe Senegalese objective of self-sufficiency in rice in the face of Indian export restrictions
Behind the scenes, another actor is also ready: Russia. Thanks to its wheat production, which Thierry Pouch estimates at nearly 100 million tonnes for 2024, Moscow has powerful leverage to exert even greater influence in the geopolitics of the continent. If necessary, the Russians will be able to supply the precious cereal to African states.
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