Rice Prices Expected to Surge Amidst Tight Market Conditions
Published on: January 12, 2024.
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The rice market is expected to remain tight in the beginning of the year due to India’s export restrictions and increased demand during festivals. This could lead to further price increases, which would impact household budgets. The price of Thai white rice 5% broken, an Asian benchmark, has eased to $646 per ton but still remains near a 15-year high.
The export ban imposed by India is expected to continue until at least the general election in April or May. Prime Minister Narendra Modi aims to control local prices before the elections. Additionally, concerns about the impact of El Niño on key growing areas have added to supply worries.
Countries in Asia and Africa have been scrambling to secure rice supplies since India implemented its export restrictions in July. This has caused rice inflation in the Philippines and has prompted Indonesia to seek assistance from its military to boost output. With a presidential election approaching next month, Indonesia, a major rice importer, is trying to address these supply concerns.
However, it is unlikely that prices will reach the 2008 record of over $1,000 per ton when broader export bans were in place. Vietnam’s Mekong Delta farmers are expected to start harvesting their new crop this month, which should help alleviate some of the supply concerns. The winter-spring harvest is typically the largest crop in Vietnam.
The Thai rice exporters association, responsible for setting prices for Thai white 5% broken rice, predicts that the country’s exports will decrease this year, particularly to Indonesia after its election. Thailand is the second-largest rice exporter in the world, while Vietnam holds the third spot.
(Source: Bloomberg)
**Source:** [Source](https://www.bnnbloomberg.ca)
