A string of Indian rice export bans and adverse weather conditions that could affect production, rice prices have soared to a 12-year high.
According to the United Nations food agency, the Food and Agriculture Organization (FAO) All Rice Price Index for July increased by 2.8% to 129.7 points.
The figure is up 19.7% from a year ago, and the highest nominal value since September 2011. Data from the FAO shows the sharpest price increase is Thailand.
Concerns over the potential impact of El Nino on production by some suppliers have lent further support to rising prices, according to the report.
It is also affected by disturbances caused by rainfall and quality variability in Vietnam's ongoing summer-autumn harvest.
In the meantime, prices were also affected by India's move to ban the export of non-basmati white rice last month to help ensure the availability of sufficient supplies and moderate price increases in the domestic market.
As the world's leading rice exporter, India accounts for more than 40% of global rice trade.
Although it affected a portion of India's overall rice shipments, the FAO stated that the export restrictions 'raise significant food security concerns for a large part of the world's population'.
Rice prices hovered at a decade high, with crude rice futures last trading at $16.02 per hundredweight (cwt).
Analysts believe rice prices will continue to see an increase in August compared to last month.
Oil prices have the potential to jump further if other countries follow India's lead in implementing export restrictions.
While El Nino could worsen global production risks in other major Asian rice producers such as Thailand, Pakistan and Vietnam.
