Even though the price of wheat and other agricultural products has decreased, the price of rice is rising, indicating that the impact of the food inflation shock that plunged millions into poverty is still being felt. The price of Thai rice, a standard throughout Asia, has risen to its highest level in almost two years. The increase is being driven by strong demand, with some importers purchasing additional grain to replace wheat after the Ukraine War disrupted supplies. A stronger Thai currency has also assisted in driving up the cost of goods in dollars. Some consumers have reportedly been stockpiling up ahead of festivals. Half of humanity depends on rice as a basic grain, and while wheat prices reached record highs in March of last year, rice prices remained relatively stable for the majority of 2022, limiting food inflation in Asia. Costlier rice will now come as bad news to billions of people in countries like China, India, and Vietnam. The United Nations has identified the price increase as a risk and emphasized the need for continued vigilance over food security. According to Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, Iraq and Indonesia have been major customers for Thailand, the second-largest rice exporter. He stated, “Iraq has been diligently buying our rice every month.” However, as the price of Thai rice rises, the number of new orders has begun to decline. When the fresh crop enters the market in March, prices may begin to decline as buyers in China and Malaysia switch to less expensive choices, according to Chookiat.

Key Points

• Even though the price of wheat and other agricultural products has decreased, the price of rice is rising, indicating that the impact of the food inflation shock that plunged millions into poverty is still being felt.

• A stronger Thai currency has also assisted in driving up the cost of goods in dollars.

• However, as the price of Thai rice rises, the number of new orders has begun to decline. When the fresh crop enters the market in March, prices may begin to decline as buyers in China and Malaysia switch to less expensive choices, according to Chookiat.