Rice prices in the global market have plunged to over two-year lows on slack demand, higher inventories and stiff competition among producers, traders and experts. Projections of higher production and carryover stocks have compounded the situation.
Vietnam has cut its prices sharply to become one of the most competitive in the global market, with Pakistan a step ahead of it. However, Thailand’s prices are the highest, at least $30 a tonne higher than India’s.
Offer prices
“Global white and parboiled rice markets continued to decline during February amid generally subdued demand and strong export competition. Thai 5 per cent broken values fell to a fresh two-year low, albeit as quotations stabilised somewhat by the end of the month. In Vietnam, the winter/spring harvest was a bearish influence, while weak purchasing from the Philippines added to the negative tone. Offers in India and Pakistan retreated amid tepid buying interest,” the Agricultural Marketing Information System (AMIS), an arm of the UN’s Food and Agriculture Organisation, said.
According to the Vietnam Food Association, Hanoi is offering 5 per cent broken white rice at $389 a tonne. In comparison, Pakistan’s offers were at $378, India’s at $405 and Thailand’s at $412. In the parboiled sector, Indian and Pakistan are in a stiff contest.
“There are huge inventories with some of the buyers. Orders are slow for India, and most are for parboiled,” said New Delhi-based exporter Rajesh Paharia Jain.
“Orders are less for us though some consignments are going to Vietnam,” said M Madan Prakash, Director, Rajathi Group that trades in agricultural produce.
Currency fluctuations
Also, there have been huge defaults by Vietnam traders, and they are now clearing the mess with offers being cut to $400, he said.
“Vietnam has dropped prices sharply because newly-harvested rice has begun to arrive. Their main buyers—Indonesia and Philippines— are fully stocked,” said BV Krishna Rao, President, The Rice Exporters Association.
Currency fluctuations, particularly a weak Pakistani rupee, have led to the market turning bearish. “Though Pakistan rice may be priced higher in the domestic market, the low value of its rupee value makes it lower in dollar terms,” said Prakash.
AMIS’ latest market monitor pegged 2024-25 global rice production at 543 million tonnes (mt) compared with 534.8 mt in the 2023-24 season. While supplies are projected higher at 742.8 mt (728.5 mt in 2023-24), utilisation is estimated at 539 mt (527.5 mt). Exports are pegged at 59.9 mt (59 mt), leaving ending stocks at 206 mt (199.7 mt).
Record India crop?
According to the US Department of Agriculture, India could be harvesting a record 145 mt of rice against 137.82 mt a year ago.
Industry sources said that with rice stocks bulging in the granaries, the government will likely permit exports of 100 per cent broken rice, banned since September 2022.
“However, the question is, whether we can be competitive again in the market,” said a trade source.
The USDA expects India to export at least 22.5 mt in 2025, gaining sharply as it has lifted most of the curbs on exports.
In contrast, Thailand, Vietnam and Pakistan are projected to witness a fall in their exports. Thailand and Vietnam are expected to ship out 7.5 mt, while Pakistan’s shipments will likely drop to 5.3 mt.
Though some experts see India gaining from the US standoff with Mexico and Canada in the rice market, traders said the situation needs a close monitoring.