Leading ingredients experts, Eurostar Commodities warn that the severe drought in southern Spain and Portugal is having a drastic effect on the price of long grain rice and resulting in forecasted tighter supplies and a price increase of almost one third (29%).
- Spain – The volume of the next Spanish long grain rice crop will drop significantly by -70% as a consequence of the severe drought
- Portugal – 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.”