W37: Rice Update

Published Sep 22, 2023
W37: Rice Update

In W37 in the rice landscape, the Food and Agriculture Organization (FAO) expects global rice stocks to reach a record high of 198.1 million metric tons (mmt) at the close of 2023/24 season. This projection is primarily attributed to India and China, which are anticipated to account for nearly 75% of global total rice stocks. In contrast, other countries are likely to register a second consecutive decrease in aggregate rice reserves by the end of the 2023/24 season, reaching an estimated 51.4 mmt, the lowest level in the past four years.

The Vietnam Food Association (VFA) indicates that rice export prices significantly dropped at the end of W37. Vietnam’s 5% broken rice traded at USD 613 per metric ton (mt) and 25% broken rice at USD 598/mt in W37, both decreasing by USD 30/mt compared to the peak prices set on August 31. Similar rice export price reductions were observed in Thailand and Pakistan, with prices settling at USD 611/mt for 5% broken rice and USD 608/mt for 25% broken rice. Rice export prices plummeted despite several positive factors in the global rice market, such as the Philippines abandoning its price ceiling policy and Indonesia initiating a bid for 300 thousand mt of rice.

The rice export price drop is primarily attributed to reduced demand, particularly from the Philippines, the largest importer of Vietnamese rice. The sluggish demand occurred as traders await a government decision on reducing import tax rates from 35% to 10%, which could significantly impact their business. The African and Chinese markets also have existing rice inventories, leading to limited imports as rice prices remain relatively high. Although rice export prices decreased from their peaks, they remain relatively high. Experts predict that export rice prices will remain elevated due to crop failures in many countries and India's expected rice export ban until 2024.

The Central Statistics Agency (BPS) reports that Indonesia’s rice imports amounted to 1.59 mmt from Jan-23 to Aug-23, a significant increase compared to the same period in 2022. Rice shipments were primarily sourced from Thailand at 802 thousand mt (50.36%), Vietnam at 674 thousand mt (42.33%), and India at 66 thousand mt (4.16%). These rice imports largely consisted of semi-milled or whole-milled rice, accounting for 88.52% of the total rice imports during the period. The Indonesian government tasked Perum Bulog with importing 2 mmt of rice throughout 2023 to bolster the country’s rice reserves.

The Brazilian Rice Industry Association (Abiarroz) indicates that Brazil’s husked rice exports totaled 296.5 thousand mt, valued at USD 100.9 million in Aug-23. This represents a significant increase of 20.3% in volume and a notable surge of 30% in value compared to Aug-22. The Brazilian milled rice shipments were primarily destined for the United States (US), Gambia, Spain, the Netherlands, Peru, Venezuela, Cuba, Guatemala, Saudi Arabia, and Trinidad and Tobago.

Additionally, Brazil’s processed rice exports reached 130.9 thousand mt, worth USD 40.1 million in Aug-23, a rise of 26% year-on-year (YoY) in volume and a growth of 33.8% YoY in value. These processed rice shipments accounted for 44.17% of the total volume of processed cereal exports for Aug-23, highlighting their substantial contribution to the market.   

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