The increasing demand from the buyers of Africa has increased India’s rice export prices in the world market. The market demand for rice production has increased due to drought in Thailand. Thailand squeezes the supply of rice. Therefore, the Indian market will be anticipated to grow a further jump rate in the coming months.
The reduced production for the rice in Thailand will limit shipments and support global prices which are trading near their highest level in the world market. Rice plantations are affected drastically due to drought. It will create less production in the current fiscal year.
Rice production in the next marketing year which will be started on month October 2020 could fall below the benchmark of rice trading value.
In the last financial year 2019, rice export fell below 8 million tons. A dip of 30.4 percent from the same period export of a year earlier. The major factors have dipped the price of the rice in the market.
- Low rainfall to hit the rice export.
- Rice exports competition tightens in the market.
The dried seasons start at the month of November and could last through April, drought has been declared in the 14 provinces of the country. The major affected parts are northern, northeastern, and central.
The Thailand Government also asked the farmers in some provinces not to grow rice plants in the current situation.
Thailand has been suffering from severe environmental conditions. The drought condition of the environment has affected the production of rice. Africa is the highest importer of rice from Thailand. Buyers from Africa have been making purchases fearing prices could rise further due to the drought in Thailand.
As Thailand is the second-largest exporter in the market, due to unavailable adequate stock, India will get the opportunity to export bulk volumes of rice in the market.
Traders and exporters from India attributed the upward trends in the market, it is expected that so far this year it will be gained more than 8 percent from the last year.
However, the prices remain high in the international market due to the global demand for rice worldwide.