FAO Recommends Four Nations to Address Indian Rice Export Limitations
Published on: November 8, 2023.
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Rice Exports: India and Vietnam Experience Decrease, Other Asian Countries to Compensate
Rice exports from India and Vietnam have seen a decline recently. However, countries like Thailand, Pakistan, Myanmar, and Cambodia are expected to offset this decrease and contribute to overall Asian rice exports. According to the Food and Agriculture Organization (FAO), Asian rice exports are projected to be 6 percent higher than the five-year average.
The FAO’s “Crop Prospects and Food Situation” report indicates that global rice reserves are expected 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. The increase is primarily anticipated in India, with additional contributions from Pakistan and the US. These contributions could balance out stock drawdowns in other major rice-exporting nations.
India has implemented several restrictions on rice shipments since September 2022, impacting its exports. These measures include a ban on damaged rice shipments and white rice exports, a 20 percent duty on parboiled rice, and a minimum export price of $950 per tonne for basmati rice shipments. These restrictions aim to ensure food security due to adverse weather conditions affecting paddy crop production. The Agriculture Ministry estimates rice production at 106.31 million tonnes, falling short of the 112 million-tonne target.
The decline in rice exports from countries like Thailand has led to a 2 percent reduction in global rice prices in October compared to September, as reported by the FAO. The FAO’s All Rice Price Index averaged 138.9 points in October 2023, showing a 24 percent increase from the previous year.
The reduction in export quotations was most significant in the Japonica and Glutinous rice markets. The Japonica Index dropped by 8.9 percent compared to September, reaching its lowest level since December 2021. The Glutinous Index also fell by 5.3 percent, reaching a three-month low.
In Asian markets for Indica rice, where India is a key producer, significant deals were limited to ongoing purchases by Indonesia’s Bulog in October. India approved shipments of 1 million tonnes to seven countries to address food emergencies in African nations and fulfill bilateral commitments. However, overall rice exports across Asia declined.
Thailand faced weak offshore demand due to the weakening of the baht against the US dollar. In Pakistan, new crop arrivals helped offset the impact of the rebound in the Pakistani rupee’s value on prices. Vietnamese rice quotations remained resilient, particularly for lower-grade rice, as export availability was tighter.
Regarding price changes, Thailand’s 5 percent broken white rice prices declined by 5 percent to $584 per tonne from $612 between August and the present. The prices of their 25 percent broken white rice also dropped by nearly 8 percent to $558 from $605. Bangkok’s parboiled rice prices decreased to $584 from $615.
In India, parboiled rice prices currently range from $498 to $502 per tonne, compared to $478 to $482 previously. In Vietnam, white rice prices have increased, while Pakistan offered its rice at a substantial discount compared to Thailand’s prices, ranging from $20 to $60 per tonne.
Although India and Vietnam have experienced challenges and restrictions affecting rice exports, other Asian countries are expected to increase their exports, leading to a 6 percent growth in overall rice exports from the region. Global rice reserves are projected to recover, primarily driven by India, with some contribution from Pakistan and the US. Rice prices have fluctuated in different markets, influenced by factors such as exchange rates and harvest progress.
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