Global rice prices have soared to their highest level in almost 12 years, according to the United Nations’ food agency. The Food and Agriculture Organization (FAO) said that India’s rice export ban and the potential impacts of El Nino on production in some suppliers were the main factors behind the price surge.

The FAO All Rice Price Index for July rose by 2.8% to 129.7 points, the highest nominal value since September 2011. The sharpest increases in price came from Thailand, where rice prices jumped to $648 a ton, the highest level since 2008. The FAO said that concerns over rain-induced interruptions and quality variability in Vietnam’s ongoing summer-autumn harvest also provided further underpinning to prices.

India, the world’s leading rice exporter, banned exports of non-basmati white rice on July 20, as the government seeks to keep a cap on soaring food prices at home, and ensure there are enough supplies domestically “at reasonable prices”. The country accounts for more than 40% of the global rice trade3. The FAO noted that India’s export restriction “raises substantial food security concerns for a large swathe of the world population”.

Rice prices are hovering at decade highs, with rough rice futures trading at $16.02 per hundredweight (cwt)4. And these prices could climb higher. India’s non-basmati white rice export ban came at a time of seasonal low inventories in major global suppliers of rice, especially those in Asia5. Prices could surge further if other countries follow suit in implementing export restrictions.

Rice, being a vulnerable crop, has the highest probability of simultaneous crop loss during an El Nino event, a scientific study showed. El Nino is a climate phenomenon marked by extreme temperatures and weather conditions that could interrupt lives and livelihoods1. To make matters worse, Thailand, the world’s second largest exporter of rice, is now encouraging its farmers to plant less of the crop in a bid to save water as a result of low rainfall.

Rice is vital to the diets of billions in Asia and Africa, contributing as much as 60% of total calorie intake for people in parts of Southeast Asia and Africa2. The latest price jump increases stress on global food markets already roiled by extreme weather and the escalating conflict in Ukraine. Higher rice prices will contribute to food inflation, particularly for poor households in the major rice consuming nations of Asia.