Situated in Asia, India is the world’s largest producer of rice after China. India contributes to 40% in the global shipment of Rice. However, India has other competitors in terms of rice exports like Vietnam, China, Myanmar, and Thailand. The export price of rice is touching heights from past two years for a second consecutive week. The major importers of Indian rice are Saudi Arabia, Oman, UAE, Iran, Traq, USA, UK, Kuwait, Canada, Yemen Republic.
Despite, high price of rice, the local dealers continued to bid rice at more competitive prices in contrast to other Asian hubs.
Recent Trend In Market
This week the price of 5% of most exported broken parboiled variety of rice i.e. RI-INBKN5-P1 was $387 to $395 a tonne, similar to the price in the last week. A Mumbai-based crop exporter stated that, regardless of the current hike in prices, buyers are still considering cheaper as compared to the other destinations. The price of Thailand’s 5% broken parboiled variety of rice RI-THBKN5-P1 is also at its peak since March 2021 and last week it was recorded the highest at $500 per tonne.
The Vietnam market is closed for the Lunar New Year and the Thai rates are also high. The rice traders and exporters associated the increased level of price with strong baht due to which the profit margin seems to decline for the overseas sales; this led them to increase the export rates of rice.
Owing to the elevated price, the supply of rice in the domestic market of India is also narrowing. The authorities in New Delhi also decided to cease its COVID-era free food distribution programme and change it with a cheaper programme.
Asian Rice: Price Rise Near 2-year Tightens The Supply
A Bangkok-based trader said, due to high prices of Indian rice, the demand is limited. Besides that, the supply is also decreasing because it was the last harvested crop of the season. According to rice traders and exporters, if the Thai currency keeps on increasing then, the export of Thai rice would not be able to strike the target.
Previous week, the rice export association of Thailand reduced its rice export quota 2023 from 8 million tonnes to 7.5 million tonnes due to strong baht.
Bottom Line
India is exporting rice to various countries and accounts for almost 40% in the global market. The rice prices are touching heights for the past two years. Last week, the price of rice was almost around $387 to $395 a tonne. But, according to traders and exporters, the price of Indian rice seems affordable compared to other Asian hubs. Thus, its demand is not declining. Due to the increasing demand the supply of Indian rice tightens even in the domestic market.
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