World Grain - April 2020 - 18

GRAINMARKET REVIEW

RICE

Prices rise as coronavirus
fears increase
by Chris Lyddon

150,000

100,000

50,000

0
2019-20*

2018-19

2017-18

2016-17

2015-16

2014-15

2013-14

18

(in 1,000 tonnes)

200,000

2012-13

Strong demand and tighter supplies have sent rice prices highHULQWKH¿UVWPRQWKVRIEXWDVZLWKRWKHUVHFWRUVWKH
FRURQDYLUXV&29,'SDQGHPLFDQGLWVH൵HFWRQFXUUHQF\
values, as well as fears that freight transport could be adverseO\D൵HFWHGKDYHVWDUWHGWRKDYHDQLPSDFWLQUHFHQWZHHNV
In its Grain: World Markets and Trade report of March 10,
the US Department of Agriculture (USDA) said that since the
Feb. 11 World Agriculture Supply and Demand Estimates report, "Thai 100B quotes once again rose to $451/tonne, reÀHFWLQJFRQFHUQVDERXWH[SRUWDEOHVXSSOLHVDPLGGURXJKW´
³9LHWQDPHVH SULFHV VWUHQJWKHQHG WR WRQQH UHÀHFWLQJ
harvest delays and strong demand from Southeast Asian buyers," the USDA said. "Meanwhile, Indian quotes were steady
at $363/tonne, while Pakistani quotes strengthened to $381/
tonne on steady exports to core African markets. US quotes
have risen to $615/tonne on tightening supplies. Uruguayan
quotes have remained at $516/tonne as South American harvests are beginning."
The Food and Agriculture Organization's Rice Price Update
of March 5 showed the UN organization's Rice Price Index,
which is based on 2002-04 being 100 points, up by 1.4% during February 2020 to an average of 228 points.
"Higher and lower quality Indica prices drove the monthly
increase, raising their respective indices by around 2%, each,"
the FAO said. "The Japonica sub-index also edged up by 1.2%
month-on-month, whilst the Aromatic sub-index changed little."
7KH )$2 VDLG LQWHUQDWLRQDO ULFH SULFHV LQ WKH ¿UVW WZR
months of 2020 were 2% above the levels in the same period
in 2019, with the fragrant market the only segment to sustain
SULFHGHFOLQHVUHODWLYHWRWKH¿UVWWZRPRQWKVRI
"Among the major Asian origins, Indica prices strengthened the most in Vietnam," the FAO said. "February quotations of Vietnamese 5% broken rice climbed 4.7% over January values to their highest level since December 2018. Strong
demand from Malaysian and Filipino buyers spurred the increase, coming at a time of tight availabilities as the 2020 winter-spring harvest was just getting started. Interest from East
African buyers also extended the upward streak of Pakistani
R൵HUVLQWRDWKLUGPRQWKZKLOHDVWURQJSDFHRIORFDOJRYHUQment procurement continued to underpin prices in India."
In Thailand, a depreciating Baht and buyers' switch to alternate suppliers exerted some downward pressure on prices,
EXWH[SHFWDWLRQVRIDVOXPSLQR൵VHDVRQRXWSXWSURYLGHGOLWWOH
room for Thai quotations to weaken from the 20-month highs

World rice ending stocks

*Projected
Source: US Department of Agriculture

reached in January, the FAO said.
³0DUNHW VHQWLPHQW DOVR UHPDLQHG ¿UP LQ WKH $PHULFDV
consistent with the generally poor outturn of 2019 crops in
the continent," the FAO said. "With attention turned to ongoing 2020 harvests in the major South American suppliers,
currency depreciations kept February quotations in check in
the sub-region. This is while continued interest from Central
American buyers drove prices of US No. 2 4% long-grain to
their highest level since September 2014."
The US Rice Producers Association, in its Rice Advocate
publication for March 19, said that with the coronavirus and
its resulting market impacts paralyzing the world, the rice industry has remained fairly stable over the past week.
³([SRUW ORDGLQJV ZHUH VLJQL¿FDQWO\ VWURQJHU DV ODUJH YROumes of rice continue to ship against old sales in a bid to get
in front of any border closures at this time," the association
said. "The currency and exchange rate basket have confoundHGH൵RUWVWRSUHFLSLWDWHQHZEXVLQHVVDQGWKHXQFHUWDLQW\VXUrounding long-term preventive measures against the virus has
compounded the problem. Nobody is willing to project where
the global trade will be in six months, and as a result very little
long-term trade is being accomplished. For an industry that
is as dependent on trade as rice, this is not a great scenario."
The association reported an appreciation in Asian benchmark pricing.
"Key origins are beginning to strengthen in price and are
narrowing the spread with US milled rice," US Rice said.
"This will make the US rice more competitive on the international scene, but the ability to accomplish any of these trades
is hampered by the aforementioned issues."
Chris Lyddon is World Grain's European correspondent.
He may be contacted at: chris.lyddon@ntlworld.com.
We want to hear from you - Send comments and inquiries to
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