HSBC fears possible food crisis in Asia

Rice is a vital food for the world's population. Nearly 20% of the calories consumed by half the world come from the grains, according to the Food and Agriculture Organization of the United Nations (FAO).

These figures become more relevant in Asia, since the continent consumes around 85% of the total rice production, the FAO said.

It's no wonder then that an increase in the price of rice, the highest since 2008, has set off alarm bells around the world, to the point that experts fear a possible food crisis in Asia. 

Specifically, rice export prices in Thailand have increased by almost 50% year-on-year, according to a report by economists at UK bank HSBC. They currently stand at more than $600 (€562) per tonne, taking Thailand's price as a reference. 

The report warns that the situation could have much bigger repercussions for the rest of the world, as the percentage of rice consumption has doubled in the last 25 years.

HSBC blames part of the price increase on irregular rainfall and drought, which hinder production processes in terms of harvests, supply and costs.

This is another blow to Asia, responsible for 90% of the world's rice production, according to data from the United States Department of Agriculture (USDA).

The impact of the weather phenomenon El Niño has severely affected production in India and Pakistan. In 2022, below-average monsoon rains decreased overall production in India, and devastating floods reduced Pakistan's annual production by 31%.

Russia's war in Ukraine is another aggravating factor. Due to the conflict, the price of fertiliser, energy and fuel reached record highs last year, according to World Bank data.

This, coupled with the disruption of the supply chain, has driven up production costs and squeezed producer margins.

India, the world's largest rice exporter (with 40% of the total), banned exports of non-basmati white rice in July. 

The government explained that the aim of this measure was "to ensure adequate availability of non-basmati white rice in the Indian market and to mitigate price increases in the domestic market".

Despite this, there are certain exceptions. 

India's Directorate General of Foreign Trade clarified that the