In W39 in the rice landscape, demand for Indian rice witnessed a slight uptick due to its competitive export pricing, despite a 20% export tax imposed in Aug-23. Indian rice remains cheaper than rice from other countries, attracting buyers, particularly from Asia and Africa. Despite this increase in demand, Indian 5% broken parboiled rice prices held steady, ranging from USD 525 per metric ton (mt) to USD 535/mt for the third consecutive week.
In Vietnam, the 5% broken rice price remained unchanged, ranging from USD 610/mt to USD 620/mt in W39, with stability returning to the market following recent fluctuations linked to India's export ban in Jul-23. Thailand's 5% broken rice price increased from USD 605/mt in W38 to USD 607/mt in W39, driven by exchange rate changes as the Baht hit a 10-month low. Buyers are slowing down their purchases due to high prices, with expectations of new rice supply entering the market in Oct-23, potentially causing further quotation drops.
India defended its ban on non-basmati white rice exports during a World Trade Organization (WTO) meeting on September 27, portraying it as a necessary regulation rather than a harmful tactic. India, the world's leading rice exporter, accounting for over 40% of global rice exports, faced scrutiny from several countries, including the United States (US), Japan, Australia, Brazil, Canada, the European Union (EU), New Zealand, Switzerland, Thailand, and the United Kingdom (UK). These countries saw the ban as a threat to global food security and urged India to lift it immediately.
India justified the ban by emphasizing its priority to feed its 1.4 billion population, clarifying that it did not apply to supplies to vulnerable countries facing food shortages. India allowed exceptions for Bhutan, the United Arab Emirates (UAE), Mauritius, and Singapore and pledged to support food security in rice-importing countries upon their requests. India assured that the export restrictions are temporary and subject to regular review. A group of WTO members echoed the concerns, emphasizing the challenges posed by climate factors and geopolitical conflicts on global food grain supplies.
India is expected to reduce the minimum export price (MEP) for basmati rice in the coming days due to the declining premium fragrant rice sales in the global markets. The proposed reduction would lower the floor price for basmati to USD 850/mt from the previously set USD 1,200/mt in Aug-23. This move aims to support millers and traders in boosting basmati rice exports. The MEP was initially imposed to prevent non-basmati rice from being exported under the label of basmati rice. India's decision to reduce the MEP received positive feedback, with industry leaders and experts believing it will assist farmers and prevent excess stockpiles that could negatively impact prices and the domestic rice industry. India, along with Pakistan, is a major producer of premium basmati rice, and this downward price adjustment is expected to enhance India's position in the global basmati rice market.