At a time when India has banned rice exports, exporters from countries like the US, Vietnam, Thailand and Pakistan are taking advantage of the increased prices in the international market. The price of rice exports from these countries has increased from $5 to $50 per tonne in November 2023 compared to October 2023, according to a new report by World Grain magazine.
India has traditionally been a big exporter of rice. At one time, India accounted for 40% of the world rice trade. But the government has curbed the export of most varieties of rice after prices rose in the domestic market.
According to World Grain, rice prices are trending higher in many markets around the world. In East Asia, this situation persists in Vietnam and also in various countries in the American continent. Worldwide rice prices in November 2023 were stable compared to October, but compared with November 2022, prices were up 21%, the Food and Agriculture Organization of the United Nations (FAO) said in its Rice Price Index report released in December, 2023.
However, the outlook for the rice market in India is bearish, i.e. prices are anticipated to fall here as the government is taking measures to work food inflation.
The FAO says prices of some US varieties rose. Prices in South American countries are also on a bullish trend. South America is experiencing ongoing supply constraints and the weather impact on crops in 2024-25 remains unresolved. All of these factors have served to drive up prices.
The U.S. Department of Agriculture (USDA) said in 'Grain: World Markets and Trade' report in December last year that the price of U.S. exports rose $5 to $765 per tonne from a month earlier, while Uruguay’s rate rose $30 to $790 per tonne.
Strong demand and supply constraints saw the rally.
For the first time since 2019, Uruguay prices have exceeded those in the United States, the USDA says. Vietnamese rice prices rose $11 to $687 a tonne. There is demand coming from the Philippines and Indonesia. Thai rice rose $51 to $619 a tonne. There is more demand coming from countries where supply used to come from India. In addition, a strong currency has also had an impact. In the export market, the price of Pakistani rice rose by $39 to $589 per tonne.
According to the USDA, despite the arrival of a new crop here, strong demand has driven up prices.
The U.S. is currently the sole supplier of the long-grain rice variety in the Western Hemisphere, the Organization of American Rice Growers said in its December Rice Advocate report. So prices have gone up.
Last year, the export market was weak but strong domestic demand held prices up. Domestic demand remains strong this time around. According to IMARC Group, the global rice market was worth $302.8 billion in 2023. It is expected to reach $371.8 billion in 2032.