Rice Jumps to 10-Month High on Concern India Demand Tops Output

Rice futures in Chicago rose to the highest price in almost 10 months on mounting concern that Indian inventories will trail demand, forcing the world’s second-largest producer to import grain.

Output in India has declined because of adverse weather, and the government plans to buy 26 million metric tons of the grain from farmers this year to bolster domestic stockpiles and avoid food shortages, said Dennis DeLaughter, a rice farmer and the owner of Progressive Farm Marketing in Edna, Texas.

“The government is trying to make sure they don’t have a panic on their hands, so they’re moving rice into the market early to avoid having a run on supplies,” DeLaughter said.

Rice futures for January delivery rose 10.5 cents, or 0.7 percent, to $15.22 per 100 pounds (45 kilograms) on the Chicago Board of Trade. The price earlier reached $15.28, the highest for a most-active contract since Jan. 7. The grain has rallied 17 percent in the past six months.

India may become a net importer for the first time in 21 years in 2010, Samarendu Mohanty, a senior economist at the International Rice Research Institute, said last week. China is the biggest rice producer.