Global Rice News

Buyers Seek Out Brown Rice as Supplies Tighten

According to exporters, buyers of Indian non-basmati rice are now showing interest in brown rice, specifically the Swarna variety. This comes as global rice supplies become scarcer. VR Vidya Sagar, Director of Bulk Logix, stated that Vietnam has started purchasing the Swarna variety. M Madan Prakash, President of the Agricultural Commodities Exporters Association (ACEA), revealed that they have received enquiries for brown rice but no deals have been made yet. Rajesh Paharia Jain, an exporter based in Delhi, explained that brown rice is considered equivalent to parboiled rice and can be exported with a 20% export duty. Jain and Sagar mentioned that brown rice is currently being sold for $500 per tonne f.o.b., with at least 5,000 tonnes potentially already shipped to Hanoi.

Thailand Implements Subsidy Scheme to Hold Back Rice Production

It’s worth noting this development as India has restricted white rice exports, apart from limited government-to-government transactions. Additionally, India has imposed a 20% export duty on parboiled rice shipments. They have also set a minimum export price of $950 per tonne for Basmati rice. In addition to the Indian export restrictions, the global rice market has suffered due to limited supplies. Thailand has implemented a subsidy scheme to encourage its paddy farmers to store their produce until at least March 2024. Under this scheme, farmers will be paid 12,000 baht, with an additional 1,500 baht for storage, to hold back up to 3 million tonnes. This plan aims to prevent domestic rice prices from surging.

Prices Rise as Thailand’s Scheme Impacts Rice Market

The United States Department of Agriculture has estimated that Thailand’s rice production for the 2023-24 season will be 19.5 million tonnes, which is lower compared to the previous season. The introduction of Thailand’s subsidy scheme has resulted in higher rice prices globally, compounded by weather-related issues affecting India’s rice crop. Bulk Logix’s Sagar stated that parboiled rice prices have increased from $490 per tonne to $510-515 per tonne. Nevertheless, these prices remain competitive compared to Thailand’s $585 and Pakistan’s $546-550.

FCI Stocks Could Impact Prices

Despite the rise in prices, there is a possibility of prices decreasing due to the large stocks held by the Food Corporation of India (FCI). As of November 1, FCI had approximately 20.04 million tonnes of rice, which is higher compared to the previous year. FCI procurement during this marketing year has been slower, with trade sources stating that a clearer picture will emerge in December. However, the impact of El Nino on rice production in India and other Southeast Asian countries, such as Indonesia and Thailand, remains a concern.

Export Curbs for Domestic Food Security

The Indian Ministry of Agriculture has implemented rice export curbs to ensure domestic food security. These measures are in response to the impact of El Nino on the country’s monsoon season, which experienced nearly a 6% deficit. As a result, kharif rice production in India is estimated to be 106.31 million tonnes this year, compared to 110.51 million tonnes last year.

Source: The Hindu Business Line