W16 Rice Update: Vietnam's Rice Market Under Pressure from Indian and Thai Competitors, Malaysia is Experiencing Domestic Rice Shortage Amid Weather Woes

Published Apr 25, 2024

In W16 in the rice landscape, the Vietnamese rice export market confronts obstacles from dwindling imports and competition with lower-priced offerings from India and Thailand. In parallel, Malaysia contends with a scarcity of domestically produced white rice due to unfavorable weather conditions, leading to a depletion of stocks and limited availability at designated sales points. Meanwhile, India experienced a downturn in rice export prices, contrasting with Thailand's stable prices bolstered by agreements with Indonesia and consistent demand from African nations. Peru experienced a notable uptick in rice imports in Q1-24, valued at nearly USD 18.7 million, predominantly from Uruguay. Lastly, Brazil witnesses fluctuations in rice trade, marked by decreased exports but increased imports in Mar-24, indicative of evolving patterns in global rice commerce.

Vietnam's Rice Export Market Faces Challenges Amid Changing Dynamics

Dominated by the Philippines, Vietnam’s rice export market faces challenges from reduced imports and diversification efforts by major buyers like Indonesia, China, and African nations. Despite offering competitive prices, Vietnam competes with lower-priced offerings from India and Thailand. Efforts to boost domestic production and reduce import dependency in top importing countries are pushing Vietnam to diversify its markets and enhance rice quality. The Ministry of Agriculture and Rural Development remains optimistic, projecting rice exports to potentially hit USD 5 billion in 2024, building on 2023's record of 8.13 million metric tons (mmt) valued at USD 4.7 billion. The Philippines alone accounts for over 38% of Vietnam's total rice exports. Currently, the export price of 5% broken rice is under USD 580 per metric ton (mt), while India and Thailand offer slightly lower prices. Importing countries are increasing purchases and planning to diversify supplies to reduce dependence on Vietnam.

Malaysia is Facing Domestic White Rice Shortage Amid Weather Challenges

Malaysia is facing a shortage of domestically produced white rice due to hot and dry weather conditions affecting the rice harvest and supply. According to the chairman of the food task force of the National Cost of Living Action Council, there have been no stocks of domestically produced white rice for six months. As a result, designated sales points are unable to restock, and only 15 out of 100 sales points nationwide can sell domestic white rice at the government-stipulated price of USD 5.44 per kilogram (MYR RM26/kg). Each sales point can only sell 100 to 200 packets of domestic white rice.

Indian Rice Export Prices Dip, Bangladesh Approves Imports to Tackle Domestic Price Hikes

Indian rice export prices have recently dipped to their lowest level in almost three months, now ranging from USD 538 to 546/mt, primarily due to subdued demand. This decline follows a peak of USD 560/mt recorded in Mar-24. In contrast, Thailand's rice prices have remained steady at USD 585/mt, supported by a recent agreement with Indonesia and sustained demand from African nations. To tackle domestic price hikes, Bangladesh has approved the import of 124 thousand mt of rice, expected to arrive by the end of May-24. Meanwhile, Vietnam's rice market activity slowed down due to the Hùng Kings’ Festival, with weak demand persisting as buyers delay purchases in anticipation of potential price decreases. Thailand's 5% broken rice prices were quoted at USD 585/mt on Thursday, maintaining stability despite the recent holiday period. Traders attribute the steady prices to ongoing demand from African markets and a recent rice deal with Indonesia, where buyers sourced rice from Thailand, Vietnam, and Pakistan.

Surge in Rice Imports Marks Shifting Dynamics in Peru's Market

Peru witnessed a significant surge in rice imports, totaling over 22.5 million kg in Q1-24, valued at nearly USD 18.7 million. Uruguay emerged as the dominant contributor, accounting for 64% of the total imports, while Brazil, Thailand, and other countries also played significant roles. This increase highlights the shifting dynamics of Peru's rice import market and the substantial contributions of Uruguay and Brazil. Compared to the same period in 2023, the volume and value of rice imports moderately increased, reflecting the growing demand for rice in Peru.

Brazil's Rice Exports Declined in Q1-24 while Imports Surged

According to the Brazilian Rice Industry Association (Abiarroz), Brazil exported 85,400 mt of rice in Mar-24, generating revenue of USD 43.2 million. This marks a decrease from the same period in 2023, where exports totaled 115,800 mt, with revenues of USD 46.4 million. The main destinations for Brazilian rice exports included Cuba, Senegal, Gambia, Peru, the United States (US), Cape Verde, Curaçao, Canada, Jordan, and Barbados. Moreover, rice exports in Q1-24 reached 267.6 thousand mt, generating revenue of USD 104.1 million. On the import side, Brazil imported 116 thousand mt of rice in Mar-24, amounting to USD 49.5 million. From Jan-24 to Mar-24, the country imported 455,200 mt of rice, equivalent to USD 195.8 million.