Ongoing monsoon flooding has inflicted Southeast Asia with the worst damage in decades due to its severity and extent. Countries in the region were caught off guard as the torrential rains and flooding have come about one month earlier than historically common. The devastation will likely affect rice trading at the end of 2011 through to early 2012 as rice cultivation by the world's leading rice exporters – Thailand and Vietnam – plus losses to the Philippines as the world's largest rice importer have all been greatly affected.
Given this, it is expected that rice prices in the global market will increase substantially in the coming months. Prices could even be driven up further with the recent implementation of the rice mortgage program by the Thai government, but such increases may be restrained by the fact that India has resumed white and parboiled rice exports after having suspended such exports in 2009. Nevertheless, global rice prices should sustain high levels until at least mid-2012; thereafter, prices will hinge upon the second crop output or the total rice exports by Thailand and Vietnam after mid-2012.