El Nino threatens Asia rice harvests as prices hit 18-month high
Why it matters: Lower output in Vietnam, the Philippines and India could lift food inflation as Chicago rice futures have climbed about 40% this year.
A strengthening El Nino is drying rice-growing areas across Asia, threatening harvests in key producers as farmers already face higher fuel and fertilizer costs. In Vietnam, growers in Quang Tri province said two months of drought damaged fields before limited rain arrived this month. In the Philippines’ Central Luzon, some farmers delayed sowing because there was not enough water to flood paddies. India’s monsoon rains, which began in June, are running about one-sixth below normal, adding pressure on the world’s top rice exporter. Thailand rice prices, a regional benchmark, recently reached an 18-month high, while the most-active Chicago rice futures are up about 40% this year. The International Rice Research Institute warned that drought, costly groundwater pumping and reduced fertilizer use together pose a major risk to this season’s crop.