by Chris Lyddon
Share This:

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 quotations were down by 1%, influenced by a retreat of prices in the 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 contrast, they showed a tendency to firm in India, mirroring the support to the market provided through large government procurement purchases, and in Pakistan, on large trader purchases and a slight firming of the currency. In the Americas, prices generally declined in Argentina, the United States and Uruguay, while they continued to firm in Brazil, on a tightening of supplies.”

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% broken up marginally, to $355 fob, it said. Values firmed on smaller than anticipated new crop arrivals and worries about prospects for 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.