India rice prices continue to drop as export duty negatively impacts demand in Asia
Published on: October 26, 2023.
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Parboiled Rice Export Prices Decline Due to Tax Extension, Vietnam Sees Increased Demand
Parboiled rice export prices from India have fallen for the fourth consecutive week due to an extension of a tax on shipments, resulting in decreased demand. Meanwhile, Vietnam has experienced a rise in rates with fresh interest from Indonesia.
The prices for India’s 5% broken-parboiled rice have dropped to $495-$505 per metric ton, down from $510-$520 last week. The export duty on parboiled rice was extended by India on October 13, and it will remain in effect until March 2024.
The decline in paddy prices, coupled with the commencement of new season supplies, has enabled exporters to reduce export prices. A New Delhi-based exporter commented on the situation, stating that the decrease in paddy prices allows for more competitive pricing in the market.
In response to complaints from farmers and exporters regarding the floor price set for basmati rice exports, the Indian government is expected to lower the minimum price. The current floor price has been deemed detrimental to trade.
Bangladesh has decided to maintain the ban on aromatic rice exports despite good yields and reserves, as the country grapples with high domestic prices.
On the other hand, Vietnamese 5% broken rice prices have seen an increase, reaching $640-$645 per metric ton, up from $625-$630 last week. This rise can be attributed to strong demand from Indonesia and stagnant domestic supplies. The trader in Ho Chi Minh City also noted that tensions in the Middle East may prompt countries to stockpile food, further driving up prices.
In Thailand, 5% broken rice prices have slightly declined to $568-$570 per metric ton, compared to $575-$580 last week. The release of additional supply by millers and demand from Indonesia, particularly before Christmas, have contributed to the softening of prices. Furthermore, India’s decision to ease export restrictions on non-basmati white rice for certain countries, as well as weaker demand from Africa, have played a role in the declining prices.
Overall, the parboiled rice market has been affected by the tax extension in India, leading to lower export prices. Conversely, Vietnam has experienced increased demand, driving up prices. Thailand has seen a slight decline in prices due to various factors including additional supply and fluctuating demand.
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