In W27 in the rice landscape, the Agricultural Market Information System (AMIS) expects global rice production in the 2023/24 season to reach 523.7 million metric tons (mmt), higher than the June estimate of 523.5 mmt and the 517.6 mmt in 2022/23. This estimate is in line with the United States Department of Agriculture (USDA) forecast of 520.5 mmt and the International Grains Council (IGC) projection of 524.5 mmt.
India's recent increase in payments to farmers had a notable impact on global rice prices. As the world's largest rice exporter, accounting for more than 40% of global rice exports, India's policy decisions carry significant weight in the food market. The domestic cost increase and the new minimum support price implementation resulted in higher Indian rice export prices, triggering a ripple effect among other rice suppliers. The imminent threat of the El Niño weather pattern, which poses a significant risk to rice yields in major producing countries, adds pressure on rice prices, which is already at an 11-year high. Furthermore, decreasing inventories in China and India, coupled with rising demand in recent years, contribute to the tightening supply-demand dynamics, further driving up rice prices.
The Ministry of Agriculture and Rural Development (MARD) in Vietnam forecasts a positive outlook for Vietnam's rice industry in the second half of 2023. Vietnam's rice exports are projected to rise due to higher-than-expected demand from the Philippines, China, and Indonesia, which are still buying strongly, creating favorable conditions for rice exports. Vietnam has opportunities to expand high-quality rice exports to newly opened and strict markets like Europe, South Korea, Australia, and Middle East countries. MARD reports that Vietnam's rice export volume for the first half of 2023 reached 4.27 mmt, valued at USD 2.3 billion. This is an increase of 22.2% in volume and 34.7% in value compared to the same period in 2022. The average rice export price in the first six months of 2023 was estimated at USD 539/mt, up 10.2% compared to the same period in 2022. MARD estimates Vietnamese rice production in 2023 to reach 43.11 mmt, a slight increase compared to 2022. Meanwhile, Vietnam’s rice exports in 2023 are expected to reach around 8 mmt, valued at more than USD 4 billion.
Lastly, during the final week of Jun-23, paddy rice prices in the Brazilian market experienced fluctuations before settling around USD 16.89/50kg. The Center for Advanced Studies on Applied Economics (CEPEA) attributed this movement to the marginal strengthening of the United States (US) Dollar against the Brazilian Real, incentivizing rice sellers to engage in foreign market transactions. Consequently, rice trading companies became more active in the last few days of Jun-23, actively sourcing rice to fulfill export agreements. Throughout Jun-23, the CEPEA/IRGA-RS Indicator, representing 58% whole grains with cash payment, ranged between USD 16.76/50kg and USD 17.04/50kg, with the maximum value representing only a 1.7% increase from the minimum. The monthly average stood at USD 16.88/50kg, down 3.8% MoM but up 12.7% YoY.