World Grain - October 2015 - 20

GRAINMARKET REVIEW
Rice monthly price

Rice

450

Prices lower on slow demand,
currency movements

390

by Chris Lyddon

360
330

Aug 2015

Jul 2015

Jun 2015

May 2015

Apr 2015

300

Mar 2015

420

Feb 2015

Slow demand and currency movements have pushed export quotations from the world's major rice suppliers lower. At the same time,
concerns are being expressed over adverse weather in some of the most
important producing regions.
In a commentary on its Rice Price Update September, the United Nations Food and Agriculture Organization (FAO) reported a 0.7% or twopoint fall in its All Rice Price index, bringing it to a value of 209 points.
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sub-indices, while those tracking Japonica and aromatic rice quotations
remained steady," it said. "In the aromatic market segment, India and
Pakistan's basmati prices rebounded somewhat in August, compensating for a continuing drop in Thailand, where the fragrant 100% B quotaWLRQIHOOEHORZSHUWRQQHIRUWKH¿UVWWLPHVLQFH0D\´
Slow import demand and currency movements weighed on export
quotations of the major suppliers, it said.
"At $382 per tonne, the benchmark Thai 100% B white rice price was
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and Vietnam, and in South America, while prices held steadier in the
United States and Australia."
According to the FAO All Rice Price Index, international rice prices
averaged 8.7% lower over January-August 2015 compared with the corresponding period in 2014, it said.
"The slide was steepest for aromatic rice prices, which were 30%
cheaper year-on-year," it said.
The International Grains Council (IGC) also reported lower prices.
"Across much of Asia and the Americas, white and parboiled fob prices
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the end of August. "The IGC GOI rice sub-Index posted a net fall of 3%
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"Increasing worries about lagging monsoon rains in key rice-producing states in India offered only marginal market support, as a weakening
domestic currency weighed, the key 5% broken grade dropping by $26,
to $362 fob. In Thailand, news of fresh sales from government stocks
and a softening of the Thai baht against the U.S. dollar pressured, while
heightened worries about competition from Vietnam prompted some
traders to lower prices in a bid to boost buying interest."
The IGC reported recent large purchases by China.
"Data from the General Administration of Customs, which exclude
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million tonnes, an increase of 16% y/y," it said. "The country's large
purchases are attributed to the wide differential between domestic and
international prices."
It also discussed the effects of the weather. "Global rice production

U.S. dollars per tonne

5% broken milled white rice, Thailand nominal price quote
Source: World Bank

prospects typically hinge on monsoon rainfall to replenish water reserves," it said. "In Thailand, rainfall during the current season has generally been below average, despite a good month in the northeast in July
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continue to warn of water shortages.
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months in Vietnam and Cambodia, potentially affecting key crop outcomes. In July, authorities in Vietnam's central and northern regions
advised farmers to switch to drought-resistant alternatives to rice. Warnings from the government of Indonesia continued in August in relation to
dry weather in Sumatra and Java, important islands for rice cultivation."
In its Rice Outlook for September, the USDA's Economic Research
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yields which have caused a reduction in the global crop. It forecast
world rice production for 2015-16 at 475.8 million tonnes (milled basis),
a drop of 2.9 million from its forecast a month earlier and almost 1%
down on the record of the previous year.
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The U.S. Rice Producers Association has welcomed a phytosanitary
protocol agreed between the United States and China.
"The U.S. has not been permitted to ship to China because rice was
not included in the original negotiations that resulted in the sale of millions of tonnes of soybeans and cotton and other grains," the association
said. "That now changes with the new phytosanitary protocol.
"A number of importers and distributors in China have been idenWL¿HGDQGLWLVOLNHO\WKDWWKHQHZO\SHUPLWWHGWUDGHZLOOJHWRIIWRD
fast start. It is not clear how large the trade could become once the
logistics and the commercial terms are perfected, but China could
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has been slammed by the loss of markets and low-priced subsidized
foreign competition."
Chris Lyddon is World Grain's European correspondent.
He may be contacted at: chris.lyddon@ntlworld.com.
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