Rice prices in the global market have dropped to their lowest levels in over two years due to slack demand, increased inventories, and intense competition among producers and traders. Projections of higher production and carryover stocks have further worsened the situation.
Vietnam has significantly reduced its prices to become one of the most competitive players in the global market, with Pakistan slightly ahead of it. On the other hand, Thailand has the highest prices, approximately $30 per tonne more than India’s.
According to the Agricultural Marketing Information System (AMIS), global white and parboiled rice markets saw a decline in February due to weak demand and fierce export competition. Offer prices for 5 per cent broken white rice were reported at $389 a tonne in Vietnam, $378 in Pakistan, $405 in India, and $412 in Thailand. In the parboiled sector, India and Pakistan are engaged in stiff competition.
Industry experts noted that there are significant inventories with some buyers, resulting in slow orders for India, mainly for parboiled rice. Vietnam traders have reportedly defaulted on payments, leading to a mess that is now being resolved through price cuts to $400.
Currency fluctuations, particularly a weakened Pakistani rupee, have contributed to the bearish market. Market monitoring by AMIS indicates that global rice production for the 2024-25 season is projected to be 543 million tonnes, with supplies estimated at 742.8 million tonnes.
India is expected to achieve a record crop of 145 million tonnes, leading to surplus stocks in the granaries. The government is likely to lift the ban on exports of 100 per cent broken rice, which has been in place since September 2022.
The US Department of Agriculture forecasts that India will export at least 22.5 million tonnes in 2025 after the removal of export restrictions. In contrast, Thailand, Vietnam, and Pakistan are expected to witness a decline in their exports.
Despite some experts predicting India’s gain in the rice market due to the US trade standoff with Mexico and Canada, traders emphasize the need for close monitoring of the situation. The USDA anticipates India’s increased competitiveness in the global rice market post-export restrictions removal.
