Global rice prices could rise as the world's leading rice producer China faces the threat of severe flooding in key agricultural regions, analysts at Fitch Ratings said.
Three Chinese provinces, which account for 23% of the country's rice production, have been threatened with flooding. Due to heavy rains and typhoons, fields are already flooded and yields will decline this year, the rating agency said in a report.
China is the world's largest rice producer. Fitch believes that the country will have to increase imports to make up for the losses, and this will lift world rice prices, which are already at multi-year highs.
"Strong rains in China's grain-producing northeast region, which will reduce yields, are likely to put upward pressure on already high global rice prices," Fitch Ratings said in a report.
In recent weeks, China has experienced severe flooding, including due to Typhoon Doksuri. The largest flood in 140 years occurred in Beijing. At the end of July, India imposed a ban on the export of white rice, and Thailand urged farmers to reduce crops due to water shortages.