World rice prices fell to a multi-year low
7 May 17:10
World rice prices have fallen to a multi-year low as the currency of India, the largest rice exporter, strengthens, and large Indian stocks and a bumper harvest in Asia will limit any price increase this year.
This is reported by Reuters, "Komersant Ukrainian" reports.
It is noted that although lower rice prices benefit price-sensitive consumers in Africa and other regions, it is likely to further reduce the already meager incomes of farmers in other countries in Asia, which produces almost 90% of the world’s rice.
What could have caused the drop in rice prices?
Rice prices fell in April, a month after New Delhi lifted the last restrictions on grain exports set to expire in 2022, pushing export prices for Indian steamed rice to a 22-month low. Prices in Thailand fell to the lowest level in three years, and in Vietnam to almost a five-year low.
According to traders and industry executives, prices will remain at this level until the end of 2025, limited by surpluses in all major exporting countries. The industry expects prices to hover around $10 by the end of the year, at about $390 per ton of milled rice.
The Food and Agriculture Organization of the United Nations (FAO) estimates that global rice production in the 2024/25 trading year will reach a record 543.6 million tons, up from 535.4 million tons in the previous year. According to FAO estimates, the total world supply, including stocks, is 743 million tons, which is significantly higher than demand, which is expected to grow to 539.4 million tons. In India alone, rice stocks, including unpolished rice, in government warehouses as of April 1 amounted to 63.09 million tons, almost five times the government’s target of 13.6 million tons.
Monsoon rains are vital for the rice harvest, which requires large amounts of water. The Indian Meteorological Department predicts that in 2025 – for the second year in a row – there will be more monsoon rains than usual, which will help boost production.
The Rice Exporters Association expects that this year’s shipments from India will increase by almost 25% compared to last year to a record 22.5 million tons. This is likely to regain India’s dominant share of the global market, which stood at more than 40% before it restricted exports in 2022, surpassing the combined sales of the next four largest suppliers – Thailand, Vietnam, Pakistan, and the United States.
When Indian non-polished rice returned to the market in March, demand was stimulated by a weak rupee, which traded at 87.2 per dollar, which helped to reduce prices.
However, since then, the rupee has recovered to 84.55 per dollar, and the currencies of other exporting countries have also strengthened, preventing further falls in global rice prices. In addition, Indian farmers have the option of selling rice to the government if exporters start offering lower prices.
