In W28 in the rice landscape, Tridge’s analysis indicates that global rice prices have been on an upward trend over the past two months due to limited supplies. The United States Department of Agriculture (USDA) reports that global rice inventories are projected to reach a six-year low of 170.2 million metric tons (mmt) by the end of 2023/24. This is driven by declining stocks in major producers such as China and India amid increased demand. Consequently, the Food and Agriculture Organization (FAO) All Rice Price Index averaged 126.2 in Jun-23, a substantial increase of 13.9% (year-on-year) YoY and the highest level on record since 2012. The looming El Niño weather phenomenon poses additional concerns for Asian rice-producing countries, potentially leading to below-normal production for the second rice crop. The combination of limited stocks, adverse weather conditions, and increased demand suggests potential supply shortages and heightened price volatility in the rice market in the coming months.
In W28, Thai rice prices of Free On Board (FOB) were relatively high. Many importers were keen to replenish their rice stockpiles due to concerns about the El Niño impact, which has caused drought conditions, crop damage, and a reduction in rice supply. As of July 14, the price of Thai white rice 5% broken stood at USD 534/mt, an increase of approximately 15% over the past four months. In comparison, the price of Vietnam white rice 5% broken ranged between USD 513-517/mt, while the selling price of Indian white rice 5% broken ranged from USD 493-497/mt.
Lastly, the Brazilian rice market registered a reinforcing upward trend in indicators in W28. The strong external demand and a global deficit in cereal production contributed to the rise. According to data on shipments from Brazilian ports, at least 46.8 thousand mt are scheduled for shipment in Jul-23, with approximately 73 thousand mt already shipped. Projections for reducing Brazilian rice carry-over stocks in the second half of 2023 also support domestic prices, which consistently remain above 2022 prices. Demand in the Midwest region for rice produced in Rio Grande do Sul increased due to reduced production in other states, leading to supply problems in some processing units. The average rice sack in Rio Grande do Sul closed at USD 17.21 on July 13, indicating a 0.61% week-on-week (WoW) increase, a 0.81% month-on-month (MoM) increase, and a significant 9.80% YoY increase. The outlook for the rice market is positive, with expectations of further price increases in the coming months.