Four Nations Agree to Compensate for India’s Rice Export Curbs, Announces 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, resulting in higher rice exports from Asia. According to the Food and Agriculture Organization (FAO), exports are projected to reach 55.4 million tonnes, which is 6% higher than the five-year average. At the same time, world rice reserves are expected to recover and reach 198.9 million tonnes by the end of the 2023-24 marketing season.
The FAO’s report, called “Crop Prospects and Food Situation,” states that the increase in reserves will primarily occur in India, accompanied by improvements in rice stocks in Pakistan and the US. This could overshadow stock drawdowns in other major rice-exporting countries. However, India is expected to see lower exports due to various restrictions imposed on rice shipments since September 2022. These measures include bans on broken rice and white rice exports, as well as the imposition of a 20% duty on parboiled rice and a minimum export price for basmati shipments.
These restrictions aim to ensure food security in India, as the paddy crop has been affected by unfavorable weather conditions. The Agriculture Ministry estimates rice production at 106.31 million tonnes, falling short of the target of 112 million tonnes. Last year, kharif production reached 110 million tonnes.
The decline in Indian rice exports has contributed to a 2% drop in international rice prices in October compared to September. According to the FAO, the FAO All Rice Price Index averaged 138.9 points in October 2023, an increase of 24% compared to the previous year. Export quotations saw a decline in all major market segments, particularly in the Japonica and Glutinous markets. The Japonica Index reached its lowest level since December 2021, while the Glutinous Index fell to a three-month low.
However, buyers in Asian markets have been hesitant to make significant purchases, leading to a decrease in exports across much of Asia. The weak offshore demand in Thailand, caused by the sustained weakness of the baht against the US dollar, has added to this trend. In Pakistan, new crop arrivals have helped keep rice prices stable despite the appreciation of the Pakistani rupee. Vietnamese quotations have remained resilient due to tighter availability for export, especially for lower-grade rice.
In terms of prices, Thailand’s 5% broken white rice has seen a 5% decrease, while its 25% broken white rice is around 8% lower. Parboiled rice prices in Bangkok have also dropped. On the other hand, parboiled rice prices in India have increased, while Vietnam offers higher quotes for white rice. Pakistan is offering its rice at a substantial discount compared to Thailand’s prices.
Overall, even though India and Vietnam are experiencing a decrease in rice exports, other countries in Asia are expected to compensate for this decline. This will result in higher overall rice exports from the region.
