Global Rice Market Update

China – Chinese rice crop is facing headwinds and expected to be tight. However, Chinese food wastage has come down significantly and leads to lower than usual imports despite a tighter crop. Exports should be fairly muted compared to the last 5 year average.

India – The elephant in the room. Indian export restrictions on rice created this whole tightness in the global rice trade as she accounted for 45% of the global rice trade. There are expectations of restrictions being loosened a bit with good rains in june-july-august 2024 so far and planted area increasing by over 10%. Yields may be impacted a bit, but the crop is expected to be atleast 10 mn mt larger than the last year’s crop – giving cushion to the government there to  start loosening the restrictions come September 2024. Rice stocks are estimated anywhere between 45 mn mt to 60 mn mt and with the upcoming crop we can see a massive 60 mn mt procurement by the state agencies. They will need to liquidate some of that huge surplus, and exports can be a convenient way for that. Leakage of subsidies and free food grains to the market and that finiding its way to the international markets is a concern on which the government needs to find a way without hurting all trade participants.

Bangladesh – In the news currently for the new governmnet in place, unemployment and food inflation are key issues. We don’t expect much to happen here as far as rice is concerned as it will be fed by India in case of needing any imports. As supplies increase in the region, we don’t expect a price movement even if Bangladesh comes to the market.

Indonesia – With La Nina setting in and El Nino fading away, we expect Indonesia to not top 2024 imports. Although they will likely finish off their current buying by Feb 2025 – 1.5 to 2 mn mt more to go from current numbers.

Vietnam – Currently the most oversold of all origins and with no major supply in sight until Feb 2025, this will be the highest priced of all origins going into 2025. 5.5 mn mt already shipped out and expected supply of 2 mn mt from the Oct-Dec crop and a remaining surplus stock of 2 mn mt of the Summer Autumn crop; expected to ship atleast 2.5 mn mt more until end of Dec 2024, Early January 2025; this is a tight market. Also, as most of the exports are of fragrant rice and higher quality white rice, we don’t expect weakness in prices. We may see 600+ prices in Vietnam soon.

Thailand – Thailand is having a ball since India restricted rice exports. Exports look good and the farmers seem to be doing ok. The Baht is a wildcard as usual; but with a decent upcoming crop, supplies will improve. Prices have fallen from their highs making it more affordable for African buyers. Although, out of contention in the last Indonesia tender, expect them to bounce back in the next one as Vietnam will be under pressure. Myanmar is also oversold and has loading concerns due to rains and supply chain constraints. Nigerian demand should kick in and we will see parboiled rice movements pickup alongwith prices.

Myanmar – Myanmar is facing a tough time with regards to the upcoming crop which is expected to be smaller – one of the few growers with such a scenario this upcoming year. Add the monsoon rains loading problems and an enthusiastic seller complex, we have a challenging environment. Although current offers are very attractive, shipments will remain a problem until Oct 2024. 2019 was a big year for exports to the Philippines and we may see a repeat of that for Oct 2024-Jun 2025 in case we see decent pricing.

Pakistan – 2024-25 can be a big year for the Pakistan rice trade as we are expecting a massive increase in the crop size. Couple that with a supportive USD:PKR exchange rate, and the exporters are salivating at the upcoming business opportunities. Considering a local consumption of 4-4.5 mn mt, and a crop size of 10-12 mn mt; this can be the largest surplus for export Pakistan has ever seen and lead to a 5+ mn mt export number. They will muscle into newer markets and expand existing ones. We need to be careful though as the early crop is high moisture and may not be suitable for a few markets like the Philippines and the last remnants are poor quality. So the right time to get a Pakistan rice shipment is Dec-April. We expect Pakistan rice prices to be very competitive for early 2025.

Nigeria – Nigeria is facing a huge food crisis and has recently opened up duty free import of rice until Dec 2024. The import substitution didn’t work as expected and the local prices are amongst the highest in the world – with one of the poorest consumers in the world. Nigeria is expected to import atleast 4 mn mt for 2025 given current scenarios; providing support to global parboiled rice prices (mainly Indian and Thai; but maybe a renewed Pakistani push).

Philippines – Philippines is the bright spot as far as consumption growth goes; however not a good sight on production numbers. Population pressures, increased consumption, and slower production growth are leading to higher import numbers every year. We expect 2024 to close at 4.3 mn mt of imports (although USDA says 4.6-4.7 mn mt) and 2025 to be 4.7-4.9 mn mt of imports as global prices fall and Filipino farmers suffer lower prices and get out of rice farming at an increased pace. Weather is also not supporting the Philippines rice crop, add to that a shortage and pricey nature of certified seeds and other inputs, and we have a 5-10% short crop than what we should generally get. Philippines is on the path to replacing Nigeria as the largest importer of rice.

Philippines’s traditional supplier Vietnam has a tight crop situation until Feb 2025 and 5% prices will remain elevated and cost around USD 625-650/mt CIF major ports. Thailand prices will also be atleast USD 600/mt for 5% and USD 550-575/mt for 25% for a few months. The situation will hopefully improve for Thai pricing in November 2024 but not much.

We expect Myanmar/India/Pakistan prices to be in the range of USD 550/mt CIF major ports.

Philippines local production is stagnating and with a higher consumption growth, we expect imports to keep rising until rice stops being the cheapest carbohydrate.

Consumption is increasing rapidly in India, Indonesia, Philippines and Bangladesh – all countries with a good rate of population growth.

World’s ending stocks have depleted significantly during the past 2-3 years and the governments need to rebuild them to withstand climate extremes and popular anger. Hence, as production increases in 2025, we may not see all of the surplus being sold at cheaper prices.