1. Weekly News

Brazil

Rio Grande do Sul Rice Harvest Faces Challenges Amid Heavy Rains

Heavy rains in Rio Grande do Sul have raised concerns among rice producers. The already delayed harvest faces further challenges due to the recent storms. The flooded fields and blocked roads have made harvesting and transportation difficult, increasing uncertainty about the productivity of the 2023/24 harvest. Data from the Rio Grandense Rice Institute (IRGA) on April 22 showed an average yield of 8.61 metric tons (mt) per hectare (ha) in the state, but the recent adverse weather conditions may affect this figure.

Indonesia

Indonesia Forecasts Record Rice Production from Apr-24 to May-24

From Apr-24 to May-24, Indonesia's rice/grain production is forecasted to surpass the levels recorded in the same period in 2023 and 2022. This projection is due to a shift in the peak harvest season for 2024. According to Central Statistics Agency (BPS) data, the peak rice harvest season in 2023 and 2022 occurred in March, with respective productions of 8.92 million metric tons (mmt) and 9.954 mmt of milled dry grain (GKG). However, production in Mar-24 decreased to 5.87 mmt of GKG, with a harvested area of ​​only 1.11 million ha. The peak rice harvest is expected to occur on Apr-24, with a harvest area of ​​1.78 million ha and national rice production projected at 9.60 mmt of milled dry grain. This shift in the harvest season indicates a relatively higher production level in April compared to the previous year's peak harvest. Furthermore, BPS estimates that rice production in May-24 will involve a harvested area of 1.12 million ha, with an estimated 5.54 mmt of GKG.

Paraguay

Challenges in Paraguay's 2023 Rice Campaign

Paraguay's 2023 rice campaign faced significant challenges due to excessive rain during the planting window, delaying implementation until Jan-24 and reducing daylight hours. The delayed planting and reduced cultivated area due to rain led to an estimated 25% to 30% YoY decrease in national cereal production compared to the previous harvest. The excess rain from Oct-23 to Dec-23 and reduced radiation affected rice productivity. Initial expectations for the harvest were between 175 thousand ha and 180 thousand ha, but the actual cultivated area fell short of this due to weather conditions.

Vietnam

Vietnam Forecasts Robust Rice Production and Export Growth in 2024

According to the Ministry of Agriculture and Rural Development of Vietnam, the country's rice production is projected to reach 43 mmt in 2024, sufficient to meet domestic consumption and export demands of more than 8 mmt of rice. In the first four months of 2024, Vietnam's rice exports surged, reaching 3.23 mmt, marking an 11.7% year-on-year (YoY) increase, with an export value of USD 2.08 billion, up by 36.5% YoY. This achievement is due to a 22.2% increase in the average export price of rice, reaching USD 644/mt since the beginning of the year. The Ministry of Agriculture and Rural Development anticipates continued active engagement in the global rice market due to unfavorable weather conditions, insufficient supply, increased food reserve imports by some countries, export bans or restrictions by others, and ongoing conflicts worldwide. Moreover, the global rice shortage is expected to be around 7 mmt in 2024, presenting opportunities for Vietnam and other rice-exporting nations.

2. Weekly Pricing

Weekly Rice Pricing Important Exporters (USD/kg)

Yearly Change in Rice Pricing Important Exporters (W18 2023 to W18 2024)

India

The wholesale price of rice in India, surged by 4.76% on a week-on-week (WoW) basis, reaching USD 0.66 per kilogram (kg) in W18. Meanwhile, the YoY comparison reveals a 24.53% increase from the W18 2023 price of USD 0.53/kg. This price hike is attributed to the government's change in calculating the 20% export duty, shifting from the Free on-board (FOB) value to the total transaction value, leading to higher export prices.

Thailand

In Thailand, the wholesale price of 5% broken rice held steady at USD 0.58/kg in W18, remaining unchanged both WoW and MoM but marking a 18.37% increase YoY. However, global prices are anticipated to increase in Q2-24 due to the El Niño phenomenon and India's rice export restrictions, driving demand from top importers like the US and Asia. Despite expected competition from Vietnam's harvest season, Thailand aims to exceed previous projections with 8 mmt in rice exports in 2024, supported by competitive prices, ample supply, and commitments to major markets in Southeast Asia, Africa, and the Middle East.

Pakistan

The price of rice in Pakistan has experienced a slight decrease since W16, dropping from USD 0.90/kg to USD 0.86/kg by W18. Furthermore, there has been a significant YoY decline of 14.85%. India's restrictions on rice exports have affected the competitiveness of various regions, Pakistan has reduced rice prices to compete with India in the global market.

Vietnam

Vietnamese rice prices experienced a WoW decrease of 3.23%, rising to USD 0.6/kg. Furthermore, the Vietnam Food Association (VFA) reported that this pricing propelled Vietnam back to the top position of export rice prices. These developments underscore Vietnam's strengthened position in the global rice market and its competitiveness in terms of pricing.

United States

The wholesale price of milled white long rice increased to USD 0.82/kg in W18, showing a slight WoW and MoM rise of 2.50% but a slight 1.20% YoY drop. This rise was due to India's rice export ban and the effects of El Niño, raising concerns about prolonged and severe rice-price inflation in 2024. The surge was due to the Indica rice variety, which saw a 25% YoY increase in 2023, driven by strong Asian buying sentiment and tightening supplies in Vietnam and Thailand. The World Bank anticipates a further 6% increase in rice prices in 2024 due to the threat of El Niño, policy responses, and geographic market concentrations. The United Nations (UN) also warns of El Niño's adverse impacts on precipitation patterns in Asia, which could disproportionately affect agricultural output in countries where agriculture contributes significantly to GDP.

3. Other Outstanding Price Anomalies

Rice Prices Soar 30.19% YoY in Brazil Amid Production Challenges

As of Apr-24, the wholesale price of rice in Brazil was USD 1.18/kg , marking a significant 30.19% YoY increase from Apr-23. However, there was a 2% MoM decrease from March 2024's price of USD 1.21/kg. The current rice price is lower than the peak price reached in Jan-24 of USD 1.23/kg.

This is due to persistently wet conditions in Rio Grande do Sul, which contributes to nearly 70% of the country's rice production. Despite being the top rice supplier in South America, Brazil's rice acreage has been declining over the past two decades due to competition from other crops like corn and soybeans. This year, there's an expected 10% increase in rice planting, but extreme precipitation may impact yields.

The rainy season in southern Brazil typically peaks from December to February, with El Niño often bringing higher-than-average rainfall. In 2023, Rio Grande do Sul experienced the second-highest total rainfall in at least 20 years, causing delays in planting. Previous El Niño years have seen rice yield declines in Rio Grande do Sul, and while there's potential for recovery if precipitation levels return to normal, ongoing monitoring is necessary.

4. Actionable Recommendations

Invest in Infrastructure Resilience in Brazil

Allocate resources towards improving infrastructure resilience in rice-producing regions like Rio Grande do Sul, Brazil, to mitigate the impact of heavy rains and flooding on rice harvests. Enhance drainage systems, road networks, and storage facilities to ensure efficient transportation and storage of rice during adverse weather conditions, thereby minimizing yield losses and maintaining supply chain integrity.

Promote Climate-Adaptive Farming Practices in Paraguay

Encourage the adoption of climate-adaptive farming practices among rice producers in Paraguay to mitigate the impact of excessive rainfall and delays in planting on cereal production. To enhance resilience to extreme weather events and optimize yields, rovide training and support for sustainable land management techniques, such as conservation tillage, crop rotation, and water management strategies.

Diversify Export Markets for Vietnam

Explore opportunities to diversify export markets for Vietnamese rice to reduce dependency on a few key markets and mitigate price fluctuations. Identify and target emerging markets with high demand for rice, particularly in regions experiencing food security challenges or seeking to diversify their rice imports, to expand market reach and minimize exposure to geopolitical risks and trade disruptions.