4 nations to compensate for Indian rice export curbs, says FAO
Thailand, Pakistan, Myanmar and Cambodia will likely compensate for reduced shipments of rice from India and Vietnam and exports from Asia are likely to be 55.4 million tonnes (mt), 6 per cent higher than the five-year average, the Food and Agriculture Organisation has said.
The UN body, in its Global Information and Early Warning System on Food Agriculture’s “Crop Prospects and Food Situation” report, said world rice reserves at the close of 2023-24 marketing season (September-August) are forecast to recover by 1.5 per cent year-on-year to a peak of 198.9 mt.
“However, much of this increase is envisaged to take place in India, where another accumulation, coupled with carry-out recoveries in Pakistan and the US, could overshadow stock drawdowns in all other major rice exporters,” the report done thrice a year said.
Food security concerns
Indian exports will be lower in view of various curbs imposed by India on rice shipments since September 2022. The Government banned shipments of broken rice in September 2022, while banning white rice exports in July this year. It has imposed a 20 per cent duty on parboiled rice from August 26 and fixed $950 a tonne as the minimum export price for basmati shipments.
The measures have been taken to ensure food security in the country in view of the paddy crop being affected by truant weather. The Agriculture Ministry has estimated rice production at 106.31 mt against a target of 112 mt. Last year, kharif production was 110 mt.
Rice exports by countries such as Thailand have helped to bring down rice prices by 2 per cent in October from September. “International rice prices dropped by 2.0 percent amid generally passive global import demand,” the FAO said in its price index.
Up 24% y-o-y
In its Rice Price Update, the UN arm said the FAO All Rice Price Index averaged 138.9 points in October 2023, but it was 24 per cent above the year-ago value.
“Export quotations declined in all the major market segments in October,” it said. The price weakness was “most evident” in the Japonica and Glutinous markets, where generally quiet trading activities were compounded by harvest progress of Calrose rice in California and Glutinous rice in Thailand.
This resulted in the Japonica Index shedding 8.9 per cent of its September value to arrive at its lowest level since December 2021, while the Glutinous Index retreated by 5.3 per cent to a three-month low.
Buyers shy away
In Asian markets of Indica rice, which India produces, substantial deals were largely confined to continued purchases by Indonesia’s Bulog in October. India also approved shipments of one million tonnes to seven nations to meet food emergencies in African nations and fulfil its bilateral commitments with countries such as Singapore.
However, buyers continued to refrain from making substantial purchases, resulting in exports falling across much of Asia, the FAO update said.
In Thailand, the sustained weakness of the baht against the US dollar added to the weak offshore demand. New crop arrivals in Pakistan helped defy the upward influence of a rebound in the value of the Pakistani rupee on prices.
Vietnamese quotations proved somewhat more resilient, especially those of lower grade rice, as availability for export was tighter.
Thai rates down but Vietnam’s up
According to the Thai Rice Exporters Association, between August first week, when prices zoomed on Indian export curbs, and now, prices of Thailand’s 5 per cent broken white rice have dropped by 5 per cent to $584 a tonne from $612, while its 25 per cent broken white rice is quoted nearly eight per cent lower at $558 against $605. Bangkok’s parboiled rice prices have dropped to $584 from 615.
In India’s case, parboiled rice prices are currently ruling at $498-502 against $478-482 a tonne. Like India, Vietnam’s quotes for white rice have increased, while Pakistan is offering its cereal at substantial discount to Thailand’s prices ranging from $20 to $60 a tonne.