World Rice Prices Rise 15% in Four Months as Supply Outlook Tightens

Wholesale rice prices worldwide have risen 15% over the past four months and are likely to remain supported by shrinking production, vietnambiz.vn reported, citing Dev Garg, national Vice President of the Indian Rice Exporters Federation (IREF), in an interview with ANI. In Vietnam's Mekong Delta, by contrast, paddy and milled rice prices were broadly unchanged at the start of October, with only marginal movement from the end of the previous week.

Mekong Delta holds flat

IR 504 raw rice was quoted at 8,700-8,800 dong per kg, while CL 555 raw rice slipped 50 dong per kg to 8,750-8,800 dong per kg. Among by-products, fragrant broken rice was steady at 8,900-9,050 dong per kg and bran traded between 7,500 and 7,750 dong per kg.

Fresh paddy prices, according to the Department of Agriculture and Environment of An Giang province, were as follows:

• OM 18 and Dai Thom 8: 6,100-6,300 dong per kg
• OM 5451: 6,000-6,100 dong per kg
• IR 50404: 5,800-6,000 dong per kg
• OM 34: 5,700-5,800 dong per kg

Export offers spread across origins

Data from the Vietnam Food Association (VFA) put Vietnamese white rice with 5% broken at 420-424 dollars per tonne. Jasmine rice was offered at 515-519 dollars per tonne, and fragrant rice with 5% broken at 440-445 dollars per tonne.

Thailand, one of the largest suppliers to the international market, held white rice 5% broken at 455-459 dollars per tonne. Pakistan quoted the same grade at 409-413 dollars per tonne. In India, white rice 5% broken traded at 382-386 dollars per tonne and parboiled 5% broken at 381-385 dollars per tonne, leaving Indian material the cheapest of the four origins.

India's output revised down, surplus still large

Garg said global rice production is forecast to fall by about 9% while demand is expected to rise 14%, a shift he described as significant given that rice is a staple for more than 35% of the world's population and that more than 50% of people eat it daily.

India produced roughly 151 million tonnes of rice last year, making it the world's largest producer ahead of China, and exported around 22 million tonnes. Garg said India currently holds a surplus of about 27 million tonnes above its safety buffer stocks, some 5 million tonnes more than its total exports. Indian output had previously been projected at about 156 million tonnes but has been revised down to 146-147 million tonnes because of El Nino and other pressures. The Kharif crop has already been sown and is entering harvest, so that estimate reflects fuel and fertiliser shortages as well.

Even so, IREF expects India's total rice surplus this year to exceed 40 million tonnes, close to double its annual exports. Garg said other major producers are under strain: Vietnam has begun importing more rice from India, while Thailand and Pakistan are also facing difficulties.

Freight and input costs push landed prices higher

Rising fuel and fertiliser costs remain a concern for the rice trade. Garg said marine fuel prices have jumped from roughly 400-500 dollars per tonne to about 1,300-1,400 dollars per tonne, raising the cost of moving rice by sea and feeding through to consumer prices in importing countries.

More than 60 countries rely on Indian rice to cover domestic demand, according to Garg, and higher prices would force them to spend more on food imports. He argued that rice should be treated as a strategic national asset, and that India is unlikely to face a shortage, positioning its farmers and exporters to expand market share while output falls elsewhere.