Asian rice prices drop after India eases export curbs

Asian prices of whole-grain Indica rice fell between $10 and $72 a tonne below their September averages after India eased curbs on rice exports, the Food and Agriculture Organisation (FAO), an arm of the United Nations, has said. 

The government on September 27-28 allowed white rice exports but fixed a $490/tonne MEP. It also cut the export duty on parboiled, brown and husked rice to 10 per cent from 20 per cent. 

Also, prices of Indian basmati have dropped to 35-month lows following the arrival of a bumper crop in the market and the Indian government removing the $950/tonne minimum export price (MEP) for shipments of the fragrant rice, it said.

Thai prices data

Data from the Thailand Rice Exporters Association show that rice prices have dropped by about 10 per cent since India eased export curbs on the foodgrain. While 100 per cent grade B white rice price has dropped to $524 a tonne from $586, 5 per cent white rice slipped to $509 (from $570), 25 per cent white rice to $497 ($550) and white broken rice A1 super to $456 ($486). 

Vietnam’s 5 per cent broken was quoted at $524, 25 per cent at $512 and 100 per cent broken at $442. At the farm level, prices in Vietnam have dropped marginally. 

A trade analyst said Indian parboiled rice was available from Kandla at ₹34,000 a tonne F.O.B ($409). The reasons for the competitive prices are the alleged diversion of rice meant for the public distribution system and farmers being forced to sell below the minimum support price (MSP). 

Orders flooding

“We are flooded with orders from almost all places. Our buyers are back mainly given the quality of Indian rice,” said Rajesh Jain Paharia, a Delhi-based exporter. 

S Chandrasekaran, a Delhi-based trade analyst, said the premium between Indian and Thailand rice has come down in the past year. “We have to see how the market reacts with the premium down to $25-30 levels currently,” he said. 

Currently, parboiled rice from India is quoted at $498-502 a tonne. Thailand offers at $521 and Pakistan at $549-553. 

Other factor

On the other hand, the situation has to be watched out for in the white rice. “Whether India’s MEP on white rice will have an impact, we have to wait and see. But an interesting development is that prices of rice from the Americas have increased by $200 over the past 5 years,” Chandrasekaran said. 

The other factor that could influence global rice prices is the impact of Typhoon Yagi in Vietnam, Thailand and Myanmar, where heavy damage has been reported to life and property. 

Meanwhile, the FAO All Rice Price Index (FARPI) averaged 133.1 points in September 2024, down 0.7 per cent from August and 6.1 per cent below the year-ago level. This was mainly due to a fall in aromatic prices, particularly Basmati.   

FAO said Brazil was offering good prices for parboiled rice, which is helping the rise in prices of Indian parboiled and Thai A1 Super rice. 

Chandrasekaran said the current Middle-East tensions could also impact rice prices since currencies may fluctuate, particularly in South-East Asia. “The Indian rupee may tend to be more stable,” he said.