Italian Arborio rice prices soar to record highs due to poor harvests from bad weather

The Italian rice harvest has been delayed by three weeks due to unfavorable rainy weather, pushing up rice prices to record highs.

Over the past year, Arborio prices have surged by 48%, rising from Eur744 per metric ton on Oct. 13, 2023, to Eur1,450/mt on Oct. 11, 2024. Indica rice prices have increased by 12.8%, moving from Eur731/mt on Oct. 13, 2023, to Eur839/mt on Oct. 11, 2024. This price fluctuation indicates that the rise in Arborio prices reflects market expectations of a supply shortage. The reduced planting area this year, coupled with adverse weather conditions, has led to a tighter supply, driving prices higher.

As of Oct. 11, Platts has assessed the prices for Indica 5% WR and Arborio 5% WR at Eur839/mt and Eur1,450/mt, respectively, ex-works.

A trader said, "Currently, only around 30% of the fields have been harvested, with heavy rainfall hindering progress." He added that about 70% of the crop remains unharvested, leading to uncertainty regarding future developments.

According to sources from Italy, current weather conditions, particularly recent rains and storms, are anticipated to affect this season's total harvest yield. With most rice still in the field during heavy rainfall, there is a considerable risk of reduced yield per hectare due to lodging, delayed harvesting, and potential quality loss from sprouting. It has been noted that the overall yield for the unharvested rice could decline by 5% to 10% or more. Arborio varieties have been harvested in limited quantities, resulting in below-average yields that are driving prices up, prices for Indica and other rice types, which had been falling, have since stabilized due to the recent weather effects.

Rice imports into EU

Due to domestic harvest challenges this year, traders anticipate a potential increase in demand for Indica rice imports. If local production of Indica varieties experiences a substantial decline due to reduced area and weather-related issues, import volumes may rise to compensate for the shortfall. The EU ranks as the fourth largest importer of rice, particularly focusing on Indica varieties. According to data from European Union Agriculture, during the marketing year 2023-24 (September to July), a total of 3,810 mt of milled Indica rice was imported to Europe. In contrast, imports for the previous two years were significantly higher, at 13,614 mt in 2022-23 and 17,102 mt in 2021-22.