Rice Soars as Ukraine War Starts Scramble for Any and All Grains

(Bloomberg) -- Rice is the latest commodity to get swept up in the turmoil of Russia's invasion of Ukraine.

Prices for rice are surging because traders are betting it will be an alternative for wheat, which is becoming prohibitively expensive. Exports of wheat from Russia and Ukraine account for more than a quarter of the crop's trade worldwide and a fifth of corn sales. Shipping in the Black Sea region is already engulfed in chaos.

“Everyone's trying to buy every type of starch they can,” said Arlan Suderman, chief commodities economist at StoneX. “With wheat supplies tightening up dramatically on the world market, you're going to see demand shifting to rice to fill that need to feed people.”

Everything from wheat to oil to fertilizer is soaring as the war ramps up fears of supply-chain shakeups. That's further exacerbating inflation worries at a time when hunger emergencies are on the rise.

Rice jumped as much as 4.2% to $16.89 per 100 pounds, the highest since May 2020. The staple grain is also heading for an 11% weekly gain, the most since 2018.

In a bright spot, global supplies of rice are plentiful, with bigger exports coming from India, the biggest exporter, and world stockpiles forecast to increase by 0.4 million tons. In the U.S., spring planting is underway in southern Louisiana and along the Texas coast, half of which will be exported to the world market.

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