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 A farmer is planting rice in a rice field in Thailand.

Prices for Thai rice have risen due to concerns about drought.

According to the Food and Agriculture Organization of the United Nations, over a span of two weeks, quotes for Thai white rice have witnessed a price increase of $38, thereby elevating the average monthly price to $562 per ton. This marks the highest level since February 2021.

The primary reasons behind the surge in global rice prices, which are approaching a 12-year high, include apprehensions regarding the impact of the El Niño natural phenomenon on production. Additionally, disruptions caused by rains and variations in the quality of Vietnam's ongoing summer-autumn harvest have contributed to the situation.

Thai rice

El Niño involves fluctuations in the temperature of the surface layer of water in the equatorial part of the Pacific Ocean, significantly influencing climate. This natural phenomenon typically occurs every 2-7 years and results in reduced rainfall in Southeast Asia and southern Australia.

Earlier this month, the Thai Rice Exporters Association (TREA) estimated that the influence of the El Niño phenomenon might lead to a reduction in rice production in the country by 1-2 million tons. This is in comparison to the normal annual production of 20 million tons of polished rice.

Another factor contributing to the rise in rice prices is the decision of India, the world's largest exporter, to halt exports of all rice except basmati since July of this year. This move aims to augment the nation's domestic rice reserves.

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