Four Countries to Provide Compensation for India’s Restrictions on Rice Exports, Confirms FAO
Published on: November 7, 2023.
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Thailand, Pakistan, Myanmar, and Cambodia are expected to make up for the decrease in rice shipments from India and Vietnam. According to the Food and Agriculture Organization (FAO), rice exports from Asia are projected to reach 55.4 million tonnes, which is 6 percent higher than the five-year average.
In its report titled “Crop Prospects and Food Situation,” the FAO stated that global rice reserves are forecast to recover by 1.5 percent year-on-year, reaching a peak of 198.9 million tonnes by the end of the 2023-24 marketing season (September-August). The increase in reserves is mainly expected in India, with additional recoveries in Pakistan and the US, which could outweigh stock drawdowns in other major rice-exporting countries.
India has imposed several restrictions on rice shipments since September 2022, leading to lower exports. The government banned the export of broken rice in September 2022 and white rice in July this year. Additionally, a 20 percent duty on parboiled rice was imposed from August 26, and the minimum export price for basmati shipments was set at $950 per tonne. These measures aim to ensure food security due to the impact of unfavorable weather conditions on paddy crops. The Agriculture Ministry estimates rice production at 106.31 million tonnes, falling short of the target of 112 million tonnes.
The decline in rice prices by 2 percent in October, compared to September, is attributed to exports from countries like Thailand. According to the FAO, international rice prices dropped by 2.0 percent due to generally low global import demand.
However, despite the decrease in prices, the FAO All Rice Price Index recorded a 24 percent increase compared to the previous year. The decline in prices was most noticeable in the Japonica and Glutinous rice markets, driven by quiet trading activities and harvest progress in California and Thailand.
In Asian markets, there were limited purchases of Indica rice, primarily by Indonesia’s Bulog. India approved shipments of one million tonnes to meet food emergencies in African nations and fulfill bilateral commitments. However, significant purchases were limited due to buyer reluctance, resulting in reduced exports across Asia.
The weakness of the Thai baht against the US dollar and new crop arrivals in Pakistan impacted offshore demand. Vietnamese rice prices remained relatively stable due to tighter availability for export, especially for lower-grade rice.
During the period from the first week of August to now, the prices of Thailand’s 5 percent broken white rice decreased by 5 percent to $584 per tonne, while the 25 percent broken white rice dropped by nearly 8 percent to $558. Parboiled rice prices in Bangkok also decreased to $584. In India, parboiled rice prices ranged from $498 to $502 per tonne. Vietnam’s white rice prices increased, while Pakistan offered its cereal at a substantial discount compared to Thailand’s prices, ranging from $20 to $60 per tonne.
Overall, the FAO’s report indicates the shifting dynamics of rice exports in Asia, with countries like Thailand, Pakistan, Myanmar, and Cambodia playing a crucial role in compensating for reduced shipments from India and Vietnam.
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