The price of white (raw) rice has increased across Asia as some countries that depend on the grain as a staple are building stockpiles to overcome any problems that may arise from El Niño, The phenomenon is likely to develop in the second half of 2023. BV Krishna Rao, President of the Rice Exporters Association of India (TREA) said: “Rice prices have increased as countries like Indonesia, Philippines and Malaysia are looking to buy rice. add rice.
“There is more demand from the islands around the Philippines. The Malaysian market is also open. We also received requests from Vietnam,” said VR Vidya Sagar, Director, Bulk Logix. “The new case is likely to arrive in Vietnam by the end of this month. Buyers are asking us to expedite shipments,” said M Madan Prakash, President of the Agricultural Commodity Exporters Association (ACEA).
“Countries like Indonesia, Philippines and Malaysia are stocking up to ensure they are not affected in any way by the upcoming El Nino. They don’t want to go through the 2007-2008 experience when agricultural commodity prices exploded,” said S Chandrasekaran, trade analyst.
In 2007-08, India banned rice exports leading to the price of rice reaching $1,000 in the global market. According to the Food and Agriculture Organization (FAO), an arm of the United Nations, it has led to a crisis, harming the poor. “If the government continues to support, we will probably export the same amount of rice as last year,” said Rajesh Paharia Jain, an exporter based in New Delhi.
According to the International Grains Council, India’s 25% broken white rice is priced at $442 per ton, while Thailand and Vietnam are priced at $490 and $480, respectively. Indian rice prices have increased 27% year-on-year, more than Thailand (11%) and Vietnam (16%).
According to the FAO, production of maize, rice and soybeans could be affected in the event of an El Nino development.
The Indian Meteorological Department (IMD) says El Nino will appear during the second part of the monsoon from August, while the Australian Bureau of Meteorology expects it to develop towards the end of July. The United States found that this event led to droughts in Asia and floods in the Americas, which developed during May-June and intensified further. “One of the key developments in the global rice market is that buyers have accepted a 20% export tax on white rice,” said Jain, pointing to a 3% increase in rice exports in the past year. fiscal year 2022-2023.
“These Asian countries are buying so that they are not affected by any ban that India can use to ensure food security as it did last year when it banned rice exports,” said Chandrasekaran. noodles and broken rice”.
“India will not sacrifice its food security, although it may take care of the needs of the least developed countries,” he said.
Boil under pressure
“We are getting a 25% supply of slabs in Chennai at Rs 28,500/ton. Two weeks ago, we shipped at $430/ton and shipping to Southeast Asia. Prices have increased further,” said ACEA’s Prakash. “However, the price of parboiled rice is under stress. There is no government procurement (India) so prices are falling,” said Bulk Logix’s Sagar.
White rice prices also increased as Food Corporation of India (FCI) is buying stock for central stockpile to distribute through ration shops and to respond to any food emergencies.
FCI’s rice purchasing activity peaked at 50 million tonnes (mt) last week and it is set to meet a target of 62.17 tonnes for the current marketing year to September.
The price of parboiled rice in India is below $380/ton in the global market due to reduced demand. It has a price of over 100 USD/ton competing with Thailand and Pakistan.
Rice stocks through April 1 with FCI at a five-year low and total food stocks, including wheat, also at a five-year low, mainly due to reduced wheat purchases. influence last year.
Lower wheat production resulted in wheat purchases being affected last year, while more rice was diverted to distribution through ration shops.
India’s rice exports are supported by record rice production of 130.83 tonnes (129.47 tonnes a year ago) in the current crop year to June. Although kharif rice production fell to 108 tonnes compared to 111 tons a year ago, but production has been offset by higher rabi rice acreage.