The cost of importing rice rocketed from about $400/tonne (£274/tonne) to more than $1,100/tonne last May amid severe supply shortages. Within a fortnight the average price of a 1kg bag of long-grain rice at the Big Four had more than doubled from 57p on 8 May to £1.35 on 20 May, according to The Grocer 33 database.
This week the average retail price of rice was £1.23, up 148% year-on-year. But Mintec data shows the commodity price of Thai rice is up just 14.2% year-on-year at £191/tonne (19.1p/kg). After the peak in May, commodity prices fell back sharply as the supply crisis passed. By July the wholesale price of most types of rice was back around the $700 mark.
“During the May spike almost no-one actually bought at that price,” said Alex Waugh of the Rice Association. “There was almost no rice available to buy. Rice is back at a more reasonable price, and it is now out there to buy.”
Another industry source said there could be several reasons prices did not fall “It’s possible there are lags in the system, or that the 1kg bag is more expensive to allow savings on bigger pack sizes,” he said. “But it’s more likely the price of rice was either too low before May, or too high after it - probably a bit of both.”
A Tesco spokeswoman said: “We have been able to cut the price of rice significantly in recent months. However, the strength of the euro against the pound is keeping costs within the supply chain high.” Asda, Morrisons and Sainsbury's declined to comment.