Global Rice Prices Expected to Remain High Until Mid-2024

Rice Prices Expected to Remain Firm in Global Market Until Mid-2024

According to analysts, rice prices in the global market are likely to remain firm until mid-2024. This is due to export restrictions imposed by India, which are expected to last until April-May 2024. Additionally, the possibility of El Nino is also supporting the uptrend in prices. Research agency BMI, a unit of Fitch Solutions, stated that India’s export restrictions and El Nino risks will keep prices at recent levels.

3rd Consecutive Deficit Predicted in Global Rice Sector

The Food and Agriculture Organisation’s (FAO) Cereal Supply and Demand Brief predicts that international trade in rice in 2024 will be close to the reduced level seen in 2023. Lower purchases from Indonesia and various Eastern African countries could offset import increases from Far-Eastern importers, the European Union, and various Latin American countries. BMI forecasts that the global rice sector will experience its third consecutive deficit in 2023-24, but it will be smaller than the previous year.

Price Forecast and Rice Production Challenges

BMI has revised its rice price forecast to $15.95 per cwt for CBOT-listed second-month rough rice futures in 2024. Analysts and traders in India expect rice prices in the global market to remain firm due to export curbs in India and a scheme in Thailand that encourages farmers to hold back their paddy. The possibility of El Nino affecting rice production in Southeast Asia also adds to the challenges faced by the market.

Stabilization in the World Market and Increase in Rice Utilization

The FAO reports that the world market has stabilized since India implemented export restrictions. The FAO’s All Rice Price Index is 2.5% lower in October compared to August. However, rice prices remain elevated, with the October index 24.1% higher than the previous year. The USDA forecasts an increase in rice production and export volumes in the US for 2023-24. The FAO also raised the forecast for world rice utilization to 522.0 million tonnes in 2023-24.

Overall, while rice prices are expected to remain firm in the global market due to export restrictions and other factors, the world rice sector is predicted to experience deficit and challenges in production. However, there is optimism that conditions will normalize in the future, allowing for the reaccumulation of stocks.