SINGAPORE- A surge in wheat and corn prices is boosting demand for low-grade rice in animal rations across Asia, pushing up prices of the world’s most important staple at a time when global food inflation is already hovering near record highs.
Global crop importers are scrambling for supplies after Russia’s invasion of Ukraine severed grain shipments from the two countries, which together account for around 25 percent of world wheat and 16 percent of world corn exports.
Chicago wheat futures hit a record high last week while corn climbed to its highest in a decade after war-torn Ukraine shut its ports and Western sanctions hit Russian exports.
The price spikes in wheat and corn in turn pushed buyers to seek alternatives, including in China, by far the world’s largest feed market. Importers there are in talks to buy extra volumes of broken rice – inferior rice where the grains have been fractured during the milling process – to fatten hogs and other animals, traders and analysts said.
Rice typically trades at a steep premium to wheat, but wheat’s blistering 50 percent price surge from a month ago has sharply cut the difference between the two grains, and even made wheat more expensive than some lower grades of rice.
Benchmark food-grade rice from Thai exporters made its biggest weekly gain since October 2020 last week on the back of firmer food and feed demand, climbing 5 percent to around $421.50 a ton.
That’s the highest since last June, and sources say prices may keep rising if the disruption to Black Sea flows persists. Export prices from Vietnam and India have also climbed. – Reuters
