World rice prices rose 7% in the month due to strong demand and tight supplies

Global rice prices rose 7-8 percent in the past month, pushing prices to a 15-year high, due to higher demand and lower incomes due to the end of the season, traders and exporters said. “One of the reasons for the price hike is that the season is ending. While availability in India is good, prices are tight”, said New Delhi-based exporter Rajesh Paharia Jain.”The physical supply of rice is low in the global market, while demand is higher. Given India’s ban on rice of white and broken varieties, the global market is facing a shortage of at least 16 million tonnes (mt), which is almost a third of the annual business”, said trade analyst S Chandrasekaran.

Vietnam prices rise

In a rice update from the Food and Agriculture Organization, Vietnam prices rose to their highest nominal level since 2008, despite tight sales as traders closed earlier contracts amid tight supply. The IGC revised global trade up 4 percent to 50 million tonnes for 2023-24 due to softer procurement rates in Asia and Africa. However, in its World Agricultural Supply and Demand Assessment (WASDE) in December, the US Department of Agriculture noted that the global rice outlook for 2023-2024 is for a slight increase in supply, a decrease in trade, a decrease in consumption, and an increase in final stocks “Supplies increased by just 0.2 million tonnes to 692.8 million tonnes, mainly due to higher production in Thailand, where water availability is better than expected”. “We are expecting demand from Sri Lanka for Ponn parboil rice. The market opens the price of rice is $625-650 per tonne,” said M Madan Prakash, president of the Agricultural Products Exporters Association (ACEA). “We are not making the short grain that Africa needs”.

Unusual growth

Chandrasekaran said basmati rice exports have increased unusually in recent weeks. “Even basmati rice exports have increased sharply”. Global rice prices have risen this year due to India’s export restrictions, and New Delhi is banning shipments of white rice, imposing a 20 percent export tax on semi-milled rice and $950 per tonne to register basmati export shipments. India lifted the restrictions as its kharif rice production is estimated to be 3.8 percent lower at 106.31 million tonnes from last season’s 110.51 million tonnes. Production suffered from the effects of El Nino, which resulted in August being the driest season in 120 years, while June saw insufficient rainfall. Indonesia and Thailand were also affected by El Nino, which is caused by the warming of the Pacific Ocean, which causes drought and prolonged dry spells in Asia. Chandrasekaran said rice prices are likely to rise sharply in the coming months as the new crop is not expected to arrive in Asia until February-March. Additionally, traders said countries such as Indonesia, which is seeking 2 million tonnes, are looking to buy more to meet domestic demand.

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