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The volume of the next Spanish long grain rice crop will drop significantly by -70% as a consequence of the severe drought.
In Portugal on the ground conditions are different but the production decrease is expected to be between -10-20% down on usual production of long grain rice
The availability of water in some of these areas was not sufficient enough to allow the growing of rice at all Prices in the Far East continue to rise with the growing demand for large quantities of long grain rice from Europe.
With this severe lack of availability, prices will increase by 29%.
Ingredients expert, Jason Bull, director, Eurostar Commodities, said: “Food price inflation is still going strong and increasing due to drought and raw material availability issues.
“If we then add in currency exchange rates, transportation and fuel costs, and finance interest then the market is in a situation where price will rise sharply from early December of this year.
Retailers, restaurants and the food service industry will either have to absorb these additional costs or pass them on to customers. The market is now increasing prices to reflect a substantial decrease in raw product and huge hikes. Food inflation still has a way to go.”
According to analysis by Refinitiv Agriculture Research, corn and wheat production losses, as evidenced by record low vegetation density across the region – known as NDVIs, reached 13 and 7 million tons, respectively.
The UK imports the majority (40-50%) of corn and wheat from France, Romania, and other European countries.
As the key input materials for human food and livestock feed industries, shortages of grain supplies will inevitably result in higher prices in stores.
Thomas Walsh, director of agriculture and weather research at Refinitiv, said: “With a cost-of-living crisis and rising inflation, this unusually hot summer has added additional pressure to the agricultural sector.
“According to Refinitiv’s weather projections, relief is likely to continue in the form of high rainfall.”
