Drought, Increased Imports, and Declining Cultivated Areas Pose Challenges to Italian Rice Production

Italian rice production is expected to decline in 2023 as farmers face consecutive years of drought and stiff competition from imports that further decreased land for rice cultivation to its lowest in more than two decades. This decrease in production poses significant challenges for Italy as it cultivates 53% of the rice produced in the European Union (EU) and is also known for its high-quality rice varieties Arborio and Carnaroli, which are suitable for risotto.

About 94% of Italy's rice crop is grown in the northwestern regions of Piedmont and Lombardy, which are significant rice-producing areas. However, the scarcity of water resources in these regions has become a major concern. Rice cultivation is highly water-intensive, with an average requirement of 3,000 to 10,000 liters of water per kilogram of output. The persistent lack of rainfall and limited water availability has reduced the land dedicated to rice cultivation. In 2023, the estimated production and area sown with rice is expected to decrease by 12% YoY to 192,000 ha and 627,000 mt, the lowest figure in 18 years. This is expected to exacerbate the challenges in Italian rice production further.

Source: European Commission

The area planted decreased because of water scarcity and increased competition from Asian rice supplies in Italy. Following the abolition of European duties, Italian rice imports experienced a substantial surge of 82% YoY to 420,756 metric tons (mt) in 2022. Import figures reveal a 30% YoY increase in imports from Myanmar and Cambodia, reaching 292,000 mt during the same period. Italian rice imports in Q1-23 also increased by 18% YoY to 84,020 mt, with Pakistan, Thailand, and Vietnam as significant suppliers. Although these quantities remain relatively small compared to domestic production, the trend raises concerns in the European market. The increased competition from the Asian rice market to Italy has driven growers to explore alternative crops with greater profitability, as rice cultivation faces declining profitability due to the drought and increased imports.

Source: Trademap

Italian rice production is facing multiple challenges – drought, increased imports, and declining cultivated areas. Water scarcity remains a critical issue. Despite recent heavy rains in the Emilia-Romagna region of Northeastern Italy, the northwestern regions of Lombardy and Piedmont continue to face a scarcity of rainfall. Soil moisture levels have yet to recover from the previous year’s drought, hindering the absorption of water. Furthermore, the weather forecast from the European Crop Monitoring for July indicated that northwestern Italy predicts much warmer than usual conditions, putting pressure on Italian domestic rice production this season.