Global Rice News

International Rice Prices Surge by Over 20% in 2023

According to a recent report published by the Food and Agriculture Organization (FAO), international rice prices experienced a significant increase of more than 20% last year. The surge can be attributed to various factors, including export restrictions and unfavorable weather conditions.

The report reveals that based on the FAO All Rice Price Index (Farpi), the average international rice prices in 2023 were 21.1% higher compared to the previous year, marking the highest level in nominal terms since 2008. The price rise was primarily driven by Indica rice, which saw a substantial annual leap of 25%. Additionally, Japonica, Aromatic, and Glutinous rice also experienced price increases of 6%, 11%, and 17% respectively.

Several factors contributed to these price gains, such as production disruptions caused by adverse weather conditions and soaring input costs for major exporters in 2022/2023. Pakistan faced heightened inflationary pressure, which impacted rice prices. Concerns over the potential effects of El Niño on crops in 2023/2024 also contributed to the increase.

Furthermore, India’s imposition of export restrictions from July 2023 played a significant role in the price surge. India banned the export of Indica white rice and imposed a 20% tax on Indica parboiled rice exports. However, the Indian government granted exceptions totaling at least 3.5 million tons to various countries for food security reasons.

On the demand side, efforts to maintain stable domestic prices and strengthen reserves resulted in strong purchases by Asian and African buyers. These increased purchases also contributed to the overall increase in rice prices.

In December, the Farpi recorded an average of 141.1 points, a month-on-month increase of 1.6% and an 18.6% rise compared to December 2022. The rise in Indica rice prices drove the increase, primarily due to increased purchases by Asian buyers, tight availabilities in Vietnam, and the appreciation of the baht against the US dollar in Thailand.

The FAO Food Price Index, which monitors monthly changes in international prices of globally-traded food commodities, averaged 118.5 points in December, a decrease of 1.5% from November and a drop of 10.1% from December 2022.

The FAO Cereal Price Index increased by 1.5% in November, with wheat, maize, rice, and barley prices all rising. The increase can partly be attributed to logistical disruptions that affected shipments from major exporting countries. However, the index for the year as a whole was 15.4% lower than the 2022 average. Notably, the FAO’s All Rice Price Index registered a 21% increase, primarily due to concerns regarding the impact of El Niño on rice production and export restrictions imposed by India.

In contrast, the FAO Sugar Price Index declined by 16.6% in November, hitting a nine-month low. However, it was still 14.9% higher compared to December 2022. The decline can be attributed to increased sugar production in Brazil and reduced use of sugarcane for ethanol production in India.

The FAO Meat Price Index experienced a 1.0% decrease from November, reaching a level 1.8% lower than December 2022. This drop was primarily due to weak import demand for pig meat from Asia. Regional buying interest for bovine and poultry meat also slowed, despite ample supplies in major producing regions.

Overall, the international rice market witnessed significant price increases in 2023, driven by a combination of factors. While these increases may pose challenges for consumers, they present opportunities for rice exporters and suppliers.

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• Seeking information about Pakistani rice prices? Check out the latest prices at HAS Rice.

Source: BusinessMirror