1. Weekly News

Brazil

Brazilian Rice Market Stagnant Amidst Government Intervention and Harvest Preparations

The Brazilian rice market is stagnant, with prices steady as the production chain focuses on preparing for the upcoming harvest. This stagnation is mainly due to the federal government's intention to intervene in the rice market by importing rice to increase domestic supply, particularly in the North and Northeast regions, to reduce high prices. This has caused concerns among producers, especially those still recovering from extreme weather losses in the South. Despite a depreciated real, export activity in Brazil remains slow. Recent shipment reports indicate that Brazil will export around 13 thousand metric tons (mt) of white rice to Venezuela. In contrast, approximately 104,500 mt of processed rice are expected from Thailand by the end of Jul-24. Prices remain firm, with a 50-kilogram (kg) bag of rice in Rio Grande do Sul priced at USD 20.74 (BRL 115.90) in W29, reflecting increases of 0.54% week-on-week (WoW), 1.15% month-on-month (MoM), and 40.99% year-on-year (YoY).

India

India Extends Rice Export Certificate Exemption to European Countries

The Indian government has extended the exemption of the Certificate of Inspection requirement for rice exports to certain European countries for an additional six months. This applies to basmati and non-basmati rice exports to European Union (EU) member states, the United Kingdom (UK), Iceland, Liechtenstein, Norway, and Switzerland. The exemption means that exports to these countries will not need the Certificate of Inspection by the Export Inspection Council/Export Inspection Agency for the next six months. The exemption follows India's export ban on rice imposed in Jul-23 to control inflation and ensure food security. Although India permitted some rice exports under specific conditions, the recent notification allows rice exports to the remaining European countries without requiring a Certificate of Inspection for the specified period.

Nepal

Nepal Completes 67.3% of Paddy Transplantation by Mid-Jul-24

As of July 15, Nepal has completed 67.3% of paddy transplantation for the current season, covering 940.50 thousand hectares (ha) of land. According to the Ministry of Agriculture and Livestock Development, provincial progress is as follows: Koshi at 61.7%, Bagmati at 69.2%, Gandaki at 75%, Lumbini at 66.7%, Karnali at 78%, and Sudurpaschim at 86%. The pace of paddy transplantation has accelerated this week due to adequate rainfall.

Philippines

Philippines Set for Record Rice Imports in 2024/25 Despite High Production

Despite record rice production and ample stocks, the Philippines projects rice imports of 4.7 mmt in the 2024/25 marketing year (MY). The high import levels are due to elevated domestic prices and a recent government decision to lower import tariffs from 35% to 15%. The Philippines remains the world's top rice importer, among the top five global rice consumers. Milled rice production is projected at 12.7 mmt, slightly higher than the previous year, due to recovery from the El Niño weather pattern and government support for inputs and machinery. However, this production increase will still be insufficient to meet the record projected consumption of 17.2 mmt. The demand for rice remains strong despite inflation.

Vietnam

Vietnam’s Rice Exports Surge in H1 2024

In the first half of 2024, Vietnam's rice exports reached nearly 4.7 million metric tons (mmt), generating USD 2.98 billion in revenue, a 10.4% YoY increase in volume, and a 32% YoY rise in value. Despite being the world's leading rice exporter, Vietnam spent about USD 670 million on rice imports in this period, almost equal to the total import expenditure in 2023. The increase in rice imports is due to Vietnam's strategy of improving rice quality by shifting towards producing fragrant and high-quality varieties. This strategy has led to higher export prices and a significant trade surplus of USD 2.31 billion but also increased the need to import certain types of rice to meet domestic demand.

2. Weekly Pricing

Weekly Rice Pricing Important Exporters (USD/kg)

Yearly Change in Rice Pricing Important Exporters (W29 2023 to W29 2024)

India

In W29, wholesale rice prices in India decreased by 1.49% WoW to USD 0.66/kg, down from USD 0.67/kg in W28. This decline is due to expectations of relaxed export restrictions and higher stock levels. The Indian government is considering reducing the minimum export price (MEP) for basmati rice and replacing the 20% export tax on parboiled rice with a fixed duty to stimulate exports. These measures come as rice inventories in India have reached a record high. The country imposed various export restrictions in 2023 and continued them into 2024 to control local prices before the general elections. Lowering the MEP for basmati rice is expected to help India maintain its market share against competitors like Pakistan, which has seen record rice exports due to India’s curbs.

Thailand

In W29, wholesale rice prices in Thailand decreased by 1.75% WoW, falling to USD 0.56/kg from USD 0.57/kg. The decline was due to a weaker Thai baht (THB) and subdued demand as markets awaited the potential easing of restrictions by top exporter India. Additionally, there was a slowdown in Thai rice exports as markets anticipated potential changes in import policies, particularly from the Philippines, which might include lowering import taxes. These factors collectively influence the pricing dynamics in the Thai rice market during the week.

Vietnam

In W29, Vietnamese regular rice prices decreased by 5.13% WoW to USD 0.58/kg from USD 0.61/kg in W28. This decline is due to increased harvests and yields in the first half of 2024, which boosted export volume and value. Vietnam’s Ministry of Agriculture and Rural Development reported a 0.5% YoY increase in cultivated paddy fields to 3.48 million ha, with an average yield of 67.1 mt/ha, up by 0.7 mt/ha. Despite the WoW price drop, prices have increased by 15.44% YoY. This price trend aligns with a global downward movement influenced by potential changes in India’s rice export policies, which may lower Asian rice prices. However, global demand remains robust, with opportunities emerging as Indonesia’s rice imports are expected to rise. The Philippines may cut rice import taxes, offering the potential for Vietnamese businesses to secure favorable prices and mitigate risks.

United States

In W29, the United States (US) wholesale price of milled white long rice remained at USD 0.80/kg, with a 2.44% YoY decrease. This stability is due to recent rains that accelerated harvesting and reduced prices. India's halt on rice exports has decreased global competition, benefiting US producers. The US rice market is expected to remain strong through 2024 with diminished global rice stocks.

3. Actionable Recommendations

Implement Strategic Reserves

To address fluctuations in global rice prices and maintain market stability, countries heavily involved in rice production and trade, such as India and the Philippines, should consider establishing or expanding strategic rice reserves. These reserves would help manage supply during price volatility and supply disruptions. India’s record-high rice inventories could strategically stabilize domestic prices and support export competitiveness. Similarly, the Philippines can build reserves to mitigate the impact of high import levels and ensure consistent supply during market fluctuations.

Capitalize on Export Opportunities

Countries with solid rice production, such as Vietnam and Thailand, should capitalize on emerging export opportunities by focusing on market diversification and quality improvements. Vietnam, for instance, should continue leveraging its strong export performance and expanding into new markets, particularly where demand is rising, like the Philippines and Indonesia. Thailand should enhance its marketing strategies and product differentiation to maintain its competitive edge in global markets. By targeting new and expanding markets and improving product quality, these countries can sustain and grow their rice export volumes.

Enhance Domestic Production Support

To counteract the impact of government interventions and high production costs, Brazilian rice producers should receive targeted support to improve domestic production efficiency. This could involve investment in advanced agricultural technologies, better access to financing for small and medium-sized farms, and government subsidies for inputs such as seeds and fertilizers. Enhancing domestic production capabilities will help mitigate the effects of market volatility, support local farmers recovering from weather-related losses, and stabilize the domestic rice market in the long term.

Sources: Portal Do Agronegócio, Nagarik Network, Danviet, Theprint, UkrAgroConsult, Theedgemarkets, AgroInfo.vn