Global rice prices fall immediately after India's move to ease rice export restrictions

Global rice prices fell on September 30 shortly after India, the world's top rice exporter, gave the green light to resume exports, boosting global supplies and helping poor people in Asia and Africa buy more affordable rice.

India on September 28 allowed exports of non-basmati white rice. The decision came a day after New Delhi cut the export tax on parboiled rice to 10%, thanks to the upcoming new harvest and higher inventories in state warehouses. Suppliers from Thailand, Vietnam and Pakistan are responding to India’s move by lowering their export prices as exporters try to stay competitive and maintain their market position.

Global rice prices fell immediately after India's move to ease rice export restrictions. Illustrative photo

Global rice prices have soared to their highest in more than 15 years following India’s decision last year to ban white rice exports and impose a 20% duty on parboiled rice exports. Export restrictions imposed by India last year have allowed competing suppliers such as Vietnam, Thailand, Pakistan and Myanmar to increase their market share and command higher prices in the global market.

India’s 5% broken parboiled rice prices were quoted at $500-$510 a tonne on September 30, down from $530-$536 last week. India’s 5% broken white rice was quoted at around $490 a tonne. Exporters in Vietnam, Pakistan, Thailand and Myanmar also cut prices by at least $10 a tonne on September 30. The Philippines, Nigeria, Iraq, Senegal, Indonesia and Malaysia are among the major Asian rice importers.

Buyers and sellers are assessing the potential impact of increased Indian rice supplies, with prices expected to stabilize in the first week of October. India accounts for more than 40% of the world's rice exports in 2022, reaching a record 22.2 million tonnes of the 55.4 million tonnes of global trade.

Thai rice prices were quoted at $540-$550 a tonne on September 30, down from $550-$560 a tonne last week. The Thai Rice Exporters Association said Thai rice export prices could fall as supply increases, but the extent of the decline will depend on a number of factors, including the appreciation of the Thai currency. Rice prices have started to correct, even in Vietnam, but traders warned that the full impact of supplies from India is still unclear.

Why India’s easing of export curbs matters for the global rice trade: India has lifted most export restrictions on rice shipments in 2023 with immediate effect, as higher-than-average monsoon rains are expected to boost crop yields amid bulging state stocks.

Several things explain India’s importance to the global rice trade: India accounted for more than 40% of the world’s rice exports in 2022, reaching a record 22.2 million tonnes out of a total of 55.4 million tonnes. India’s rice exports were larger than the next four largest exporters in the world combined: Thailand, Vietnam, Pakistan, and the United States. India exports rice to more than 140 countries. Top buyers of Indian non-basmati rice include: Benin, Bangladesh, Angola, Cameroon, Djibouti, Guinea, Ivory Coast, Kenya, and Nepal.

Iran, Iraq and Saudi Arabia are major buyers of premium basmati rice from India. Restrictions in 2023 have cut India’s rice exports by 20% to 17.8 million tonnes, and exports in the first seven months of 2024 have fallen by a quarter from the same period last year. India’s reduced exports have forced Asian and African buyers to turn to Thailand, Vietnam, Pakistan and Myanmar. The surge in demand amid limited surpluses has pushed export prices in these countries to their highest in more than 15 years.

Source: https://congthuong.vn/gia-gao-toan-cau-giam-ngay-sau-dong-thai-noi-long-han-che-xuat-khau-gao-cua-an-do-349512.html