Export prices for Indian rice have climbed to their highest level in nearly three months, driven by increased domestic paddy costs. This surge comes even as key global rice suppliers like Thailand and Vietnam grapple with persistently sluggish international demand.
Indian Prices Firm Up Amid African Hesitation
India's popular 5% broken parboiled rice variety was quoted this week at $355 to $360 per metric ton. This marks the highest price point since October 2, showing a clear rise from last week's range of $350 to $357 per ton. Industry experts point to higher local procurement costs as the primary driver behind this increase.
However, market activity is not uniformly strong. Umesh Jain, a director at the exporting firm Sponge Enterprises, noted that buyers from Africa, a significant market, are currently holding back. "African buyers are not active in the market and are delaying purchases, hoping prices will fall," Jain explained. This wait-and-see approach is creating a complex dynamic for exporters.
Global Market Struggles with Weak Demand
The story of muted demand is echoed across Asia's other rice-exporting hubs. In Thailand, the price for 5% broken rice remained steady at $410 per ton. Traders in Bangkok reported that buying activity has stalled since the Christmas week, with only previously agreed deliveries taking place. "This year, both exporters and traders have had a very tough time as prices have fallen," a Bangkok-based trader revealed.
The situation is similar in Vietnam, where 5% broken rice was offered at $360 to $365 per ton, unchanged from the previous week. A trader from Ho Chi Minh City cited a dual challenge: "Trading activity is subdued as a mini-harvest in the Mekong Delta is ending, while external demand remains weak." Vietnamese traders are apprehensive about the coming year, anticipating more difficulties. Concerns include the potential reinstatement of import limits by the Philippines and Indonesia's reduced role as a major buyer, especially with strong competition from Indian supplies expected to continue.
Bangladesh Turns to India to Curb Domestic Prices
In a significant development, Bangladesh has approved the import of 50,000 metric tons of rice from Indian trading house Bagadiya Brothers. The approval, granted on December 22, comes at a cost of $359.77 per ton, which was the lowest bid in an international tender. This move is part of Bangladesh's strategy to stabilize its local market, where rice prices have soared by 15 to 20 percent over the past year. Despite increased imports and cuts in duties, prices for consumers in Bangladesh remain elevated.
The overall supply outlook in the region remains stable, with markets anticipating fresh output from the upcoming early-year harvest. The price trends highlight a diverging scenario where Indian export prices are firming up on domestic cost pressures, even as the broader global rice trade faces headwinds from uncertain demand.
