Rice prices touched four months high due to increased demand from Africa. Good demand and competitive prices are benefiting Indian rice exporters.
Increase in Price
Healthy demand from African countries edged up rice export prices to the highest level in four months. Price of Indian 5% broken parboiled rice increased from USD 369-USD 373 to USD 370-USD 375 per tonne this week. This is the highest price quoted since September. Also, appreciation of rupee supported the price rise. Further, the government data showed that rice exports fell by 18.1% in 2019, being lowest in eight years. In addition, a weak Baht decreased prices of 5% Thai parboiled rice from USD 432-USD 453 to USD 425-USD 439 last week. Thai currency fell lowest in seven months on 30th January.
Coronavirus Outbreak effect
Traders have projected a further drop in export price due to widespread Coronavirus. China accounts for a quarter of total tourists coming to Southeast Asian countries. The tourism sector of Thailand and China are worst hit by the outbreak. Being Thailand’s second-largest export market, the virus spread in China will further hit Thai rice prices. Further, domestic prices remained high as drought decreased supply in Thailand.
The price of Vietnamese 5% broken parboiled rice increased to USD 355-USD 360 per tonne from USD 345 per tonne this week. However, the coronavirus epidemic have disrupted rice deliveries from Vietnam to China. Despite this, the shipments did not see a huge decrease as China limited rice import from Vietnam for over a year. Also, the quality rice-growing area is decreasing in Vietnam due to increasing salinity. Farmers of Mekong Delta have harvested around 30% of winter crops until now.
Bangladesh provided a cash subsidy worth 15 percent of rice exports due to high international competition. Further, Bangladesh Agriculture Minister Abdur Razzak stated that the move will improve the situation of farmers struggling with low prices. However, traders demanded a cash subsidy of 20% to fight with the competitors.
In conclusion, India’s rice export prices saw an uptick while its competitors struggled from the coronavirus effect.