Global Rice News

The Asian rice market is currently facing uncertainty as top exporters prepare for a potential tender from Bulog, Indonesia’s state purchasing agency, in May. This comes in the wake of export restrictions imposed by India, the world’s largest rice exporter, causing a significant tightening of global supplies.

According to S&P Global Commodity Insights, India implemented export restrictions, including a ban on broken rice exports and additional duties on non-basmati white rice, in August 2022. In July 2023, the Indian government further restricted non-basmati white rice exports, imposed a 20% duty on parboiled rice exports, and set a minimum export price for basmati rice at $950 per metric ton. India accounted for nearly half of the global rice trade in the marketing year 2022-23, with exports totaling 20.25 million metric tons, a 9% decrease from the previous year.

While India primarily exports parboiled rice to West African nations, its basmati rice is mainly shipped to the Middle East. With India’s restrictions limiting the market, Asian rice exporters are now focusing on Bulog’s potential tender in May. So far in 2024, Bulog has announced four tenders, purchasing 1.4 million metric tons. Vietnam, Thailand, Myanmar, and Pakistan have been the top suppliers to Bulog this year. Bulog has set an import quota of 3.6 million metric tons for 2024, slightly lower than last year’s 3.8 million metric tons, due to prolonged dry conditions caused by the El Nino weather pattern in Southeast Asia, leading to reduced yields and tightening global rice supplies.

Exporters from various countries are expecting a surge in rice prices with the upcoming Bulog tender. A Pakistan-based exporter noted that Vietnamese and Thai rice prices are firming up as Bulog’s tender approaches in May. There are talks of a mid-May Bulog tender. Bulog’s tenders are seen as a positive for exporters as they usually result in price surges during purchase announcements. This demand-driven price support provides more stability to the market compared to supply cuts.

On May 6, Platts assessed Vietnamese 5% broken white rice Free On Board (FOB) at $569 per metric ton, a $5 increase from the previous week. Despite stagnant demand, global rice prices have been rising in recent years due to supply cuts caused by dry weather conditions and restrictive government policies.

Bulog has not yet provided any information about its next tender announcement, but exporters are anticipating further market volatility as the situation unfolds.

Source: [The Economic Times](https://m.economictimes.com)