Rice prices soar! HSBC warns: This reminds people of the "2008 Asian food crisis"
HSBC pointed out that the global rice import share of consumption has increased by about four percentage points since the food crisis in 2008, "which means that a supply interruption in one country may have a greater impact on other countries than in the past."
Growing supply concerns have led to a surge in global rice prices, reaching the highest level since 2008. HSBC Bank warns that this could pose further obstacles to central banks' efforts to combat inflation.
Frederic Neumann, Chief Asia Economist at HSBC Global Research, recently issued a warning to clients, pointing out similarities between the current surge in rice prices and the 2008 Asian food price crisis. He stated:
"The memory of the 2008 Asian food price panic is still fresh... At that time, as consumers and governments rushed to secure supplies, the rapid increase in rice prices in some economies quickly spread to other markets. As buyers turned to substitutes, it also pushed up prices of other agricultural products such as wheat."
During the period from 2007 to 2008, when the global financial crisis was wreaking havoc worldwide, many developing countries were simultaneously hit hard by the global food crisis.
The Food and Agriculture Organization's Food Price Index (FFPI) increased by 12% from 2005 to 2006, then by 24% in 2007, and by about 50% from January to July 2008 compared to the previous year. In 2008, the cereal price index reached its peak, growing 2.8 times compared to 2000.
Frederic Neumann pointed out that the current surge in rice prices has also sparked supply concerns. For example, Indian shoppers rushed to buy rice from US supermarkets in July after learning about India's plans to impose rice export restrictions.
Asia accounts for approximately 90% of global rice production. The El Niño weather phenomenon has caused heavy rains and droughts in major rice-producing regions such as India, which has implemented export restrictions to ensure sufficient domestic supply, further fueling global rice prices.
Neumann stated that global rice imports as a percentage of consumption have doubled in the past twenty years, increasing by about four percentage points since the 2008 food crisis. He said, "This means that a supply disruption in one country may have a greater impact on other countries than in the past."