Prices of rice exported from Vietnam scaled a more than two-year peak this week on tight supplies, with traders also flagging concerns over the likely hit to output from the El Nino weather pattern.

Vietnam’s 5% broken rice was offered at $498 per metric ton on average, a peak since April 2021, and higher than the $490-$495 last week.

Domestic paddy prices gained on tight supplies, and concerns about El Nino this year has weighed on the production outlook, traders said.

The country’s rice exports in January-May rose 30.8% from a year earlier to 3.62 million metric tons, valued at $1.9 billion, customs data showed.

Early signs of hot, dry weather caused by El Nino are threatening food producers across Asia, with a US forecaster also confirming the onset of the phenomenon this month, and predicting droughts in parts of Asia.

Thailand’s 5% broken rice prices were unchanged at $490-$495 per metric ton, not far from the above $500 levels scaled in May.

New supply hasn’t entered the market while there is export demand, and with erratic weather prompting flooding and droughts, prices will stay strong, said a Bangkok-based trader.

Short supply, and a government move to hike procurement rates, also pushed up prices of the 5% broken parboiled variety from top exporter India to a more than three-month high of $390-$398 per metric ton, versus $388-$395 last week.

Supplies from the winter-sown crop have fallen sharply in the last few weeks, pushing paddy prices higher, said a Mumbai-based trader.

India last week raised the price at which it will buy new-season common paddy from farmers by 7%.

Asia rice: Vietnam rice prices jump on low supply; traders flag El Nino risks

Domestic prices of the staple in Bangladesh, meanwhile, stayed elevated despite good harvests and stocks, and Commerce Minister Tipu Munshi said the country would increase subsidized rice sales from July to help the poor struggling with high inflation.