From surplus to strain: world rice supply threatened

Rice supply is expected to fall this year as farmers cut planting acreage across Asia because of fertiliser shortages and soaring fuel costs from the Iran war, with an emerging El Nino also set to squeeze output of the world's most consumed staple.



Rice is central to global food security, and even modest supply disruptions can ripple through countries, lifting prices and straining household budgets, particularly among price-sensitive consumers in Asia and Africa.



The UN Food and Agriculture Organization in April forecast rice output would expand by 2% to a record high in 2025/26.



The effects of the Iran war are impacting farmers in top exporters Thailand and Vietnam as well as the import-reliant Philippines and Indonesia, growers and traders said.



The war has cut fuel and fertiliser flows through the Strait of Hormuz, a key chokepoint that connects the Gulf to global markets.



Southeast Asia's mainly smallholder farmers also face mounting stress as the El Nino weather phenomenon is set to usher in hotter, drier conditions for the region in the second half of the year.



In 2008, export curbs by key suppliers more than doubled prices to about $1,000 a metric ton, triggering unrest in several countries.



More recently, supply tightness in 2022 to 2023, exacerbated by India's export restrictions, lifted prices and prompted panic buying.