W48 Rice Update: Global Rice Prices Surge Amidst Climate Change and Trade Restrictions

Vietnam and Thailand's Rice Prices Rise Due to Trade Restrictions and Solid Demand

Vietnam's 5% broken rice price rose to USD 655 to 665 per metric ton (mt) in W48, from USD 650 to 655/mt a week ago, as research and consulting firm Fitch Solutions predicted that trade restrictions and risks from El Niño weather events will support prices next year. Similarly, Thailand's 5% broken rice price rose from USD 600/mt to USD 630/mt due to solid demand from the Philippines. Meanwhile, the export price of 5% broken rice from India was unchanged, holding at USD 500 to 507/mt. However, new export orders are gradually increasing as other countries quote higher prices than India.

As of Nov-23, Vietnam cultivated 7.38 million hectares (ha) of rice, a slight decrease of 0.2% year-on-year (YoY), with a harvest area of 6.71 million ha, down by 2.2% YoY. However, the average yield increased by 1.2 quintals/ha to 61.4 quintals/ha. The total harvested output was 41.2 million metric tons (mmt), down by 0.2% YoY.

India's Rice Prices Surge by 21.73% YoY Due to Supply Shortages and Global Factors

In Nov-23, India’s rice prices increased by 21.73% YoY, reaching USD 0.48 per kilogram (kg) attributed to irregular and inadequate rainfall, leading to supply shortages and forcing farmers to abandon their paddy fields. Factors such as rising fertilizer and fuel prices and global supply constraints from the Ukraine war contributed to increased production costs and heightened demand for rice as an alternative staple. This price surge has led to global rice prices reaching their highest in a decade, potentially exacerbating food insecurity in Asian and African countries.

Brazil Rice Accessed to Kenyan Market

According to a joint statement by the Ministry of Agriculture and the Ministry of Foreign Affairs, Brazil has gained access to the Kenyan rice market. Considering Kenya's economic potential, Brazilian rice exports are expected to increase by USD 2.15 million. In 2022, Brazilian rice exports reached USD 657 million, accounting for 2% of the global rice trade. Mexico, Senegal, Venezuela, Costa Rica, and Gambia are the main importing markets. It is worth noting that Brazil opened 72 new markets in 2023 for its agricultural products.

Indonesia's Rice Price Inflation Decreases, Rice Supply Expected to Remain Secure

The Central Statistics Agency (BPS) has reported decreased rice price inflation in Indonesia, with continued weakening pressure. In Nov-23, the rice inflation rate was recorded at 0.43%. According to Moh. Edy Mahmud, Deputy for Balance Sheets and Statistical Analysis at BPS, the decrease in inflation is consistent with the trend observed at the end of 2022. Furthermore, the rice supply is expected to remain secure as 100 thousand mt of imported rice from Thailand, Vietnam, Pakistan, and Myanmar are already en route to Indonesia.