World Grain - February 2016 - 18

GRAINMARKET REVIEW

Rice
Global prices are at lowest level
since 2007
by Chris Lyddon

< World consumption
< World production

475

Stocks: major exporters a) >

a) India, Pakistan, Thailand, US, Vietnam

15/16 (f'cast)

14/15 (est.)

375

13/14

12/13

400

11/12

10/11

425

09/10

08/09

450

07/08

500

06/07

International rice prices in 2015 were at their lowest level since
2007, according to the United Nations Food and Agriculture Organization (FAO). Prices internationally were little changed from the
previous month, with variations by country according to local supply
and demand and the effects of government policies and currency.
In its commentary on its Rice Price Update for January, the FAO
said that its All Rice Price Index (2002-04) averaged 197 points in
December 2015, virtually the same value as in November, but 27
points or 12% below its level in December 2014.
"As per the various FAO sub-indices, prices were stable last month
for the Higher Quality Indica, while they rebounded by 2% for the
Lower Quality Indica rice," it said. "On the other hand, Japonica rice
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U.S. However, the most relevant development of last month was the
recovery of Basmati prices, which despite weaker Thai fragrant quotations, lifted the aromatic rice sub-index by close to 4%."
"The arrival of new crop supplies generally weighed on Thai quotations, in particular for the fragrant varieties," FAO said. "It also
affected negatively non-aromatic rice prices, bringing the benchmark
Thai 100%B white rice down by 1.6% over the month. Prices in
Vietnam, after rising in November, remained steady last month. By
FRQWUDVWWKH\VKRZHGDWHQGHQF\WR¿UPLQ,QGLDPLUURULQJWKHVXSport to the market provided through large government procurement
purchases, and in Pakistan, on large trader purchases and a slight
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Argentina, the United States and Uruguay, while they continued to
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The FAO All Rice Price Index reached a value of 211 points in
2015, 10.5% lower than in 2014, it said. The retreat was particularly
pronounced for aromatic rice, with its respective sub-index shedding
79 points or 31% compared to last year.
In its Grain Market Report in January, the IGC reported that white
and parboiled rice export prices had mostly declined since late-November 2015, with the IGC GOI rice sub-Index falling by 2%.
"Harvest pressure in India weighed, as did destocking in Vietnam
and currency movements, but declines were capped by ideas of fresh
demand from key importers, including Indonesia and the Philippines," it said.
"The Philippines' National Food Authority announced it would
import 400,000 tonnes of broken rice, likely from Vietnam, Thailand or Cambodia through diplomatic channels, for Apr-Jun delivery. Adding to earlier purchases, this helped to limit falls in prices
in Vietnam, where the market was under pressure from stock sales
ahead of 2016 main (winter-spring) crop cutting. Offers for 5% broken stood at $354 fob, a fall of $16."
In Thailand, a weaker domestic currency capped gains, with 5%
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than anticipated new crop arrivals and worries about prospects for

Rice: Supply and demand
million tonnes (milled basis)

Source: International Grains Council

off-season output amid limited water availabilities.
"In South Asia, currency movements weighed on white rice export
prices in India, 5% broken falling by $5, to $340 fob, with kharif
crop harvesting pressure adding to bearish sentiment and limiting
upside in local values," the IGC said.
"Pakistan's market was buoyed by strong international demand,
including reports of an agreement to supply 1 million tonnes to Indonesia in the next four years. Offers for 5% broken were $20 higher,
at $338 fob."
In its Rice Outlook for January, the USDA Economic Research
Service also noted the rise in Thai rice prices. "Prices for high and
medium grades of Thailand's regular-milled white rice have increased 1% to 2% over the past month, mainly due to tightening
supplies of the main crop harvest and continued shipments of rice
under government-to-government agreements with the Philippines,
Indonesia, and China," it said.
At the same time, prices from Vietnam fell. "For the week ending
Jan. 12, prices for Vietnam's double-water-polished milled-rice with
broken kernels were quoted at $357 per tonne, down $28 from the
week ending Dec. 15," ERS said. "Vietnam's prices are $2 below
price quotes for similar grades of Thailand's rice for the week ending
Jan. 12. Vietnam's rice had been selling at prices above Thailand's
since late October."
ERS also reported a continued decline in U.S. prices for long-grain
milled-rice.
"For the week ending Jan. 12, prices for high-quality U.S. Southern long-grain rice (No. 2, 4% brokens, bagged, free on board (fob)
vessel, U.S. Gulfport) were quoted at $500 per tonne, down $20 from
the week ending Dec. 15," it said. "The U.S. price difference over
Thailand's 100% grade B was $130 per tonne, down from more than
$150 in early December and well below the record of more than $200
in October."
Chris Lyddon is World Grain's European correspondent.
He may be contacted at: chris.lyddon@ntlworld.com.
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World Grain - February 2016

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