PJTAU study warns El Niño losses could lift global rice prices by 30–50%
A policy paper by Professor Jayashankar Telangana Agricultural University warns that El Niño-related production losses could raise global rice prices by 30–50%. The scenario would pose a particular risk to import-dependent markets and increase uncertainty for producers, traders and processors.
Study outlines a severe price scenario
Global rice prices could rise by 30–50% if El Niño causes significant production losses, according to a policy paper by Professor Jayashankar Telangana Agricultural University, or PJTAU. The warning links a possible contraction in rice output directly to a sharp increase in prices on the world market.
The projected range represents a risk scenario rather than an unconditional price forecast. Its outcome depends on whether El Niño reduces production and on the scale of any resulting shortfall. For market participants, the distinction is important: the paper identifies the potential price response to lost supply, not a guaranteed increase regardless of harvest conditions.
Even the lower end of the range would represent a substantial change for a staple commodity. A 30% increase would raise procurement costs across the rice supply chain, while a 50% rise would create much heavier pressure on buyers that cannot readily reduce consumption or replace imported volumes.
Import-dependent markets face greater exposure
The most immediate risk falls on countries that depend on the international market to cover domestic rice requirements. If production losses reduce globally available supply, importers would have to compete for fewer volumes at higher prices. The impact could extend from government purchasing agencies and private importers to millers, distributors and food processors.
Traders would face a market shaped by both physical availability and uncertainty over future harvests. Buyers may seek to secure cargoes earlier when they expect prices to rise, while sellers may become more cautious about committing volumes before the size of the crop is clear. Such behaviour can tighten prompt availability even before the full production effect becomes visible.
Processors and distributors would also have to decide how much of a higher acquisition cost could be passed through to customers. Businesses operating with limited inventories or narrow margins would be more exposed to sudden price movements. Companies with contracted supply would still need to assess replacement costs once those contracts expire.
Production data will determine the market response
The central variable is the size of any El Niño-driven output loss. A limited or geographically contained decline would produce a different market balance from simultaneous shortfalls across several producing areas. Until crop conditions provide clearer evidence, the 30–50% range should be treated as an indication of potential market sensitivity to a supply shock.
Producers could benefit from higher selling prices where harvest volumes remain intact, but those gains would not be uniform. Farms affected by the same weather conditions could have less rice to sell, offsetting part or all of the price advantage. Millers and exporters would likewise need sufficient physical supply to benefit from stronger international quotations.
For importers, the paper’s warning strengthens the case for monitoring production, available stocks and purchasing requirements together. The price risk does not arise from El Niño in isolation; it arises when weather-related losses leave the traded market unable to meet demand at existing prices. The eventual effect will therefore depend on how much output is lost and how buyers and sellers respond to the tighter balance.
