Fried rice is generally a well-liked selection amongst diners in Lagos, the financial capital of Nigeria. But recently many individuals have stopped ordering it, says restaurant supervisor Toni Aladekomo.
With the value of the dish taking pictures as much as N4,000 ($5.20) from N1,500 a yr in the past, it has “stopped being reasonably priced for many”, says Aladekomo, basic supervisor of Gray Matter Social House, a restaurant within the upmarket enterprise district of Victoria Island.
In Nigeria, rice is essentially the most generally consumed meal — and the bedrock of the nationwide dish jollof rice. However the worth of 1kg of the imported grain was up by 46.34 per cent in August in contrast with the identical interval final yr, in keeping with the newest information from the nation’s statistics company.
Whereas costs have risen throughout the board as Nigeria grapples with its highest charge of inflation in twenty years, the sharp enhance in the price of this on a regular basis staple will be traced to a crackdown by India, the world’s largest rice exporter, in response to fears of a manufacturing shortfall and rising home costs.
It began final yr when the federal government of Prime Minister Narendra Modi imposed export restrictions on broken rice — an affordable selection imported significantly by poorer nations from Bangladesh to Benin — which continues to be in place.
![Line chart of Prices of white rice ($ per tonne) showing Benchmark rice prices have risen in major producing countries since India’s export ban](https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd6c748xw2pzm8.cloudfront.net%2Fprod%2Fb952ed60-6f5f-11ee-a35a-9368cd4bb0e5-standard.png?source=next-article&fit=scale-down&quality=highest&width=700&dpr=1)
By the tip of July, India had banned exports of non-basmati white rice and adopted this in August with a minimal sale worth for basmati rice and a 20 per cent tariff on parboiled rice, prolonged till March.
“It’s robust when a rustic that accounts for 40 per cent of world commerce slaps a ban on half of what they export, and duties on the opposite half,” says Joseph Glauber, senior analysis fellow at meals safety think-tank Worldwide Meals Coverage Analysis Institute (IFPRI) and a former chief economist on the US Division of Agriculture.
The instant penalties of the July ban have been panic-buying amongst shoppers in Asia and North America and responsive measures from different governments in main rice-producing nations.
Now, with India’s rice harvest beneath method, internet importers are hoping for higher than anticipated yields that might immediate the federal government to ease restrictions. However an election is looming within the south Asian nation and food prices are a red-button problem for Modi. The El Niño climate phenomenon, related to warmth and drought throughout the Pacific Ocean, additionally threatens to break output subsequent yr as rising situations could also be too dry.
Analysts warn that if India maintains its present restrictions, and different producers observe, the world is on observe for a repeat of the 2008 rice disaster, when a contagion of protectionist insurance policies contributed to rice costs tripling in six months, driving inflation throughout the globe and sparking civil unrest in north Africa, south Asia and the Caribbean.
![A man eats a breakfast of rice and plantain at a market in Abuja, Nigeria](https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F21e248da-e9de-4bbd-8aed-f50b69aced7d.jpg?source=next-article&fit=scale-down&quality=highest&width=700&dpr=1)
This time the disaster might be worse, nonetheless, as hovering demand, pushed by inhabitants progress, collides with the results of ever extra excessive local weather change.
Rice costs are surging past India; the benchmark rice prices in Thailand and Vietnam, the world’s second and third largest rice exporters, have risen 14 and 22 per cent since India imposed its ban.
Arif Husain, chief economist on the UN World Meals Programme, factors out that the nations more likely to be worst affected are already affected by a litany of woes: sky-high meals costs, hovering debt and depreciating currencies.
“If you have a look at the cumulative impact, you’re primarily speaking a couple of staple commodity not being reasonably priced for tens of millions and tens of millions of households,” he provides.
Hoarding, stockpiles and riots
India has been right here earlier than. It was the primary to react in 2007 when the value of meals staples, akin to wheat and maize, rose sharply as poor climate threatened yields.
Rice was in considerable provide, however upward stress on meals costs panicked governments. New Delhi swiftly imposed export restrictions.
Vietnam — then the world’s second greatest rice provider after Thailand — adopted swimsuit and imposed a ban in January 2008. Worldwide costs soared, reaching a report excessive of $1,000 per tonne, as smaller exporters akin to Egypt and Pakistan imposed comparable bans, farmers hoarded and governments and customers stockpiled.
Frederic Neumann, chief Asia economist at HSBC, remembers grocery store cabinets in Hong Kong being emptied of rice. Elsewhere, hungry residents took to the streets. In Haiti, meals riots in April 2008 toppled the prime minister, Jacques-Édouard Alexis.
The anger over meals costs lingered and ultimately coalesced with political discontent, contributing three years later to the Arab Spring, during which 4 Center Jap and north African leaders have been overthrown.
This can be a lesson a lot of right now’s politicians have taken to coronary heart. In India, Modi’s Bharatiya Janata occasion has made controlling meals costs a precedence forward of a collection of electoral checks. Meals inflation has lengthy been a politically delicate problem within the nation and rice is its most consumed staple.
Costs of the grain had risen 11.5 per cent within the yr earlier than the ban on exports was launched, in keeping with the federal government, with exports surging over the identical interval. The price of different Indian staples akin to tomatoes and onions has additionally risen in latest months as a unstable monsoon season has disrupted agricultural manufacturing.
India’s authorities has defended the ban as a vital step to guard home meals safety amid worrying inflation, and poor harvests exacerbated by climate that scientists say has develop into extra erratic resulting from local weather change. Lots of India’s 1.4bn inhabitants proceed to battle with poverty and malnutrition, with about 800mn folks eligible free of charge meals grains.
“There’s additional precaution being taken as a result of state elections are across the nook and subsequent yr nationwide elections,” says Avinash Kishore, a senior analysis fellow on the IFPRI in New Delhi. With world oil costs additionally rising, he provides, “they don’t need a double or triple whammy” as voters head to the polls.
![Bar chart of Days above 35C in rice-growing areas of major producers, with projection to 2098 showing Climate change is expected to have a major impact on rice production over the rest of this century](https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd6c748xw2pzm8.cloudfront.net%2Fprod%2Fe7e13460-6f65-11ee-86f5-57d050926f4c-standard.png?source=next-article&fit=scale-down&quality=highest&width=700&dpr=1)
For India’s rice farmers, nonetheless, the export ban is a heavy blow.
Sandeep Kumar, 37, and his uncle, Satish Kumar, thought they have been in luck after India’s fertile northern state of Haryana prevented flooding that had destroyed crops elsewhere within the nation.
Then Modi banned exports of the non-basmati rice the Kumars had cultivated in expectation of sturdy world demand. Costs quickly tumbled within the open market, in keeping with Satish. “The federal government doesn’t worth the laborious work of the farmers,” he says, talking from a barn surrounded by inexperienced and yellow fields close to the town of Karnal. “It has its eye on elections and doesn’t need the rice costs to go up.”
Different critics of the coverage argue that the abrupt ban will damage the nation’s popularity as a dependable world buying and selling associate. Underneath Modi, India has sought to cement itself as a number one world energy by increasing commerce ties and negotiating free commerce agreements with different massive economies.
Kirti Kumar Dawar, who runs rice exporting firm Jaishree Exports in Haryana, says that he needed to retrieve almost 20 containers of rice, round 450 tonnes in whole, that have been already in a port for transport to the Center East when the ban was introduced.
![Satish Kumar](https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F82027c18-98de-4618-98a2-af226e01fbb2.jpg?source=next-article&fit=scale-down&quality=highest&width=700&dpr=1)
His purchasers within the area have since “gone silent”, he says, including that the enterprise will be unable to outlive for much longer with out making world gross sales. Dawar says he understands the federal government’s issues about meals safety, however “the knee-jerk response is fallacious”.
The argument has assist. “It takes the exporters years to develop the market,” says Ashok Gulati, an economist and longtime adviser to the Indian authorities on agricultural coverage. “This not solely upsets the exporters in your individual nation, it additionally upsets the importers who will say . . . you’re handing over the market to the opponents.”
Getting ready to disaster
India’s transfer has additionally drawn criticism globally. The IMF referred to as on New Delhi to reverse the “dangerous” step, and the US and different nations on the World Commerce Group final month reportedly questioned the necessity for restrictions whereas India’s public shares, they are saying, are sufficient.
One of many predominant issues is that the ban on rice exports has the potential to have larger reverberations than the earlier disaster.
Not solely has the nation’s share of world rice exports grown, however the quantity of rice traded around the globe has doubled from about 5 per cent in 1999 to greater than 10 per cent right now, in keeping with information from the US Division for Agriculture, analysed by HSBC.
This makes world contagion extra possible, in keeping with HSBC’s Neumann, who says “the chance is actually there of a repeat of what we noticed in 2008”.
![Column chart of Global rice exports (mn tonnes) showing Over 40% of rice exports come from India](https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd6c748xw2pzm8.cloudfront.net%2Fprod%2F61ba2a60-6f63-11ee-8fd4-657d8f073c13-standard.png?source=next-article&fit=scale-down&quality=highest&width=700&dpr=1)
“We have gotten extra reliant on traded meals to safe meals provides for particular person populations,” provides Neumann. “However on the similar time, we’re additionally seeing protectionist tendencies rising within the world buying and selling system. And that mixture shouldn’t be very wholesome.”
Different nations in Asia are following India’s lead. On the finish of August, Myanmar, the world’s fifth-largest rice exporter, introduced it will additionally ban exports of the grain for “about 45 days”. Days later, the Philippines launched a price ceiling on rice in an effort to dampen rising shopper prices.
Rising rice costs are a big impediment for central banks in Asia attempting to tame inflation. The Philippines’ and Vietnam’s consumer price indices rose 5.3 and three.6 per cent yr on yr in August, as an example.
In 2008, central bankers didn’t initially tighten financial coverage in response to the rice provide shock, as a result of elevating rates of interest doesn’t produce extra rice, says Neumann.
However they want to take action this time round, he argues, as a result of meals has a disproportionate impression on inflation expectations, which matter extra to central banks than precise inflation.
“Everybody is aware of what a bag of rice prices in India. So if the value goes up, then that instantly fuels the expectation element,” he says. Rice shouldn’t be like greens, which have a brief harvest cycle and will be rapidly replenished. Central bankers, due to this fact, “can shrug off a two-month tomato worth hike however not a nine-month grain worth spike.”
The area is making an attempt to guard its personal provides. Though members of the Affiliation of Southeast Asian Nations, which incorporates three of the 5 greatest rice exporters, dedicated to not utilizing “unjustified” commerce boundaries in September, Malaysia’s agriculture minister instructed state media this month that Asean leaders had agreed to prioritise rice provide to different members of the commerce bloc.
![Pramote Kongburi, farmer in Thailand’s Chai Nat province, inspects his dried rice field](https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F48618a59-dca1-4376-9872-38c0ce9270a6.jpg?source=next-article&fit=scale-down&quality=highest&width=700&dpr=1)
This protectionism poses a big risk to nations in west Africa, which danger being priced out of the market. They’re significantly uncovered to India’s export ban, says the WFP’s Husain. In Togo, for instance, virtually 88 per cent of all rice imports got here from India in 2022 and 61 per cent for Benin, the world’s largest importer of Indian damaged rice.
In Senegal, the place 47 per cent of rice imports come from India, Cheikh Bamba Ndaw, the ministry of commerce’s director of inside commerce, characterises his nation’s predicament as a “worth drawback, not a rice drawback”.
The scenario has echoes of what occurred final spring with wheat, says Husain. Costs of the cereal crop surged after Russia’s invasion of Ukraine, which provided 10 per cent of world wheat exports, triggering a full-blown disaster of meals safety in lots of nations.
For the time being, Senegal has reserve shares, but when India continues to maintain its borders closed and worldwide costs don’t come down, he says, the nation will probably be compelled to import different sorts of rice, from Brazil or the US, that are far more costly than the Indian rice it normally depends on.
Bamba Ndaw warns that many individuals will now not be capable of afford rice, plunging the nation right into a meals disaster.
Working out of rice
The final rice disaster got here to an finish after Japan, Thailand and Vietnam dedicated to boosting exports and transport prices fell.
Right now’s predicament, analysts warn, shouldn’t be so simply fastened. Fifteen years in the past the world was not missing within the grain, however that’s now not the case.
The world inhabitants is ready to succeed in near 10bn by 2050 with the largest progress in Africa and Asia. Researchers estimate this rise will enhance demand for rice by virtually a 3rd, however yields usually are not holding tempo.
After a long time of fast progress because of the event of latest varieties, yields are stagnating in 4 large rice-producing nations in south-east Asia, in keeping with a latest study in Nature Meals, a tutorial journal. Globally, on common yields elevated 0.9 per cent a yr between 2011 and 2021, a slowdown from 1.2 per cent a yr between 2001 and 2011, in keeping with data from the UN.
![Rice samples at a wholesale store in Guwahati, north-east India](https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F03f0b7c7-a1c1-4627-b107-6e5706444770.jpg?source=next-article&fit=scale-down&quality=highest&width=700&dpr=1)
The chief motive for this setback is local weather change. As a result of rice grows in scorching climates — 90 per cent of the world’s rice is produced in Asia — it’s typically assumed that a number of additional levels won’t matter, says Bjoern Ole Sander, a local weather scientist based mostly in Thailand. This isn’t the case. Above sure temperatures, rice yields drop, explains Sander, including that the grain is especially delicate to night-time warmth.
A 2017 research discovered {that a} world enhance in temperature of 1C was more likely to cut back rice yield by a mean of three.3 per cent. Temperatures have already risen by a minimum of 1.1C since pre-industrial instances.
Modelling by commodity information group Gro Intelligence forecasts that by 2100, Asia’s high rice exporters will all expertise a pointy enhance within the variety of days above 35C, with Thailand probably seeing an 188 extra days above this threshold in a worst-case state of affairs.
For Asia’s rice-producing deltas, from the Mekong to Ganges, local weather change may current different issues. As temperatures enhance, sea ranges rise and salty water flows into contemporary water rivers, irrigation channels and the soil, lowering yields or making rising unimaginable.
This yr producers are additionally dealing with El Niño. The climate phenomenon compounds the results of local weather change, says Sander, and might result in much less rainfall in rice-growing areas. Fewer downpours imply much less contemporary water coming down from the rivers to clean away extra salt.
Whereas India waits to measure the toll of this yr’s climate on rice manufacturing, Thailand’s agriculture ministry lately forecast that the nation’s crop could be lower than expected following below-average rainfall in September and October.
El Niño will endure properly into subsequent yr, in keeping with climate specialists. It will danger a a lot tighter provide of rice on the worldwide market, says Neumann.
He warns that this isn’t merely about the price of rice within the quick time period, however a style of how the world offers with more and more erratic climate patterns compounding volatility in world meals costs.
For WFP’s Husain, the reply is extra commerce to raised distribute meals around the globe. However he fears that as local weather change worsens, governments may more and more shut their borders and shun world markets.
The present shock may develop into “mega shock”, he says, except “frequent sense prevails”.
Local weather Capital
![](https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F384cfd92-a50b-4bce-9d00-ffdbff93b8ec.jpg?source=next-article&fit=scale-down&quality=highest&width=700&dpr=1)
The place local weather change meets enterprise, markets and politics. Explore the FT’s coverage here.
Are you interested by the FT’s environmental sustainability commitments? Find out more about our science-based targets here