Rice prices in the global market have dropped by over 10 per cent over the past fortnight, mainly because of India lifting all curbs on exports and arrivals of new crops in Pakistan and Myanmar, traders said.
“Rice cargo is being offered at discounts as the strong dollar has helped against local currencies. India’s opening up of exports has come when the new crop from Pakistan and Myanmar has arrived. For buyers, the situation has become a blessing in disguise,” said New Delhi-based exporter Rajesh Paharia Jain.
Current prices
On Wednesday, Thailand’s 5% broken white rice was quoted at $507 a tonne for 5% broken white rice, down from $529 on October 16. Vietnam’s quote is unchanged at $537-541 but it is expected to cut it. Pakistan’s offer price is at $463-467 against $481-485 a fortnight ago. Against these, India’s prices have dropped to $444-448 compared with $488-492.
In the 25% broken white rice category, India is offering at $434-438 a tonne compared with $491-495. Pakistan is more competitive in this at $424-428 compared with $440-444 a fortnight ago. Thailand is quoting $491 ($508) and Vietnam 497-502 ($509-513).
In the parboiled sector, Thailand is quoting its 100% sortexed at $522 ($561), while Pakistan is offering the rice at $493-497 ($500-504). India’s price is the most competitive at $439-443 ($490-494).
“Our white rice shipments to Vietnam have dropped to $475 a tonne from $495 a tonne cost and freight in the container,” said M Madan Prakash, President, Agricultural Commodities Exporters Association.
Low container rates
Besides a weak dollar, lower container rates are helping buyers. “Lack of shipments has resulted in container prices dropping sharply to $100. You can even get at $50,” he said. However, the trade has slowed in the past week as traders are waiting to see the extent of the fall of the prices.
“Demand is good. The rice market is trying to find its level. Prices are likely to move up a little,” said BV Krishna Rao, President, The Rice Exporters Association(TREA).
Prices could rebound a little as traders in the Philippines are interested to stock up and Thursday’s Indonesia Bulog tender could be an eye-opener on the trend, he said.
Jain said the Bulog tender could see $450-480 a tonne bids. Traders from the Philippines are purchasing rice at $475-480 cost and freight in containers.
Moving rice from Punjab
The real issue for the Indian government will be in moving 4 million tonnes of rice by rail rakes from Punjab over the next few weeks. “Thanks to India, cheaper food will be available to the global community,” Jain said.
A trade analyst from New Delhi said countries such as Malaysia could try and import rice when it is lower to build stocks in the pipeline. China is also expected to buy a good quantity of rice for feed and other purposes such as making noodles.
The Indian government on October 23-24 removed all curbs on rice exports that have been in force since September 2022. However, it retained the ban on exports of broken rice. It reduced the Customs duty on parboiled rice to zero from 10 per cent and scrapped the $490 per tonne minimum export price (MEP) on white rice.
Earlier on September 26, the Ministry cut the export duty on non-basmati parboiled rice, husked (brown) rice and rice in the husk to 10 per cent from 20 per cent with immediate effect. Also, semi-milled or wholly-milled rice, whether or not polished or glazed (other than parboiled rice and Basmati rice) allowed duty-free. It also fixed the $490 MEP on white rice.
Export curbs
India began to curb rice exports from September 2022 when it banned shipments of broken rice. It then imposed a 20 per cent export duty on white rice. These measures were taken as part of the government’s efforts to tackle food inflation and deficient rainfall in key paddy-growign areas of eastern India.
In July 2023, the country banned the export of white rice and imposed a 20 per cent export duty on parboiled rice. The government, however, made it clear that it will allow exports on a government-to-government basis besides countries, including its neighbours, that face food security issues.
The measures were taken after El Nino emerged affecting production in some of the key States such as Andhra Pradesh and Karnataka among others.
Despite El Nino affecting a fourth of the country, India’s rice production was estimated at a record 137.83 million tonnes by the Ministry of Agriculture for the 2023-24 crop year. It is higher than the 135.76 million tonnes produced in 2022-23.