World Grain - April 2021 - 14

GRAINMARKET REVIEW

Asian prices ease ahead of harvest
by Chris Lyddon

World rice prices rose in February, but the arrival of spring
crops in Southeast Asia has triggered a turn lower. US output
looks set to fall as producers turn to more profitable alternative crops.
" In Asia, prices backpedaled a few dollars per tonne as the
US dollar strengthened and Asian origins braced for the influx
of freshly harvested supplies, " the US Rice Producers Association said in its Rice Advocate publication for March 12. " Not
that the world rice market anticipates a shortage in 2020-21,
but based on the most recent WASDE report, the USDA does
expect to see the lowest carryout in three years.
" Asian exporters will find less competition from South
American origins that battle drought conditions and as rice
loses out to other more profitable crops. Similarly, Asian exporters will also face less competition in the Middle Eastern
markets from the US as growers opt to plant beans and corn to
fill China's ever-growing appetite. "
The association expected, with US farmers currently planting, to see substantial rice acres move into soybeans and corn
this spring.
" This is a market that has several factors indicating reasons
for prices to move upward but also reasons to soften, " US
Rice said. " Mercosur harvest, quality issues, demand from
Mexico, Central America, Venezuela, etc., will continue to be
monitored. "
The United Nations Food and Agriculture Organization
(FAO) said on March 4 that its All Rice Price Index had risen
for the third month in a row in February, with prices 1.5%
higher than in January and 11.4% higher than in February
2020.
The biggest rise, 3.2%, was for Japonica rice, which the
FAO said was " buoyed by a series of Far Eastern tenders, to
which concerns over water supplies for irrigation in California
added. "
" In Asia, the strength dominating Thai and Vietnamese Indica markets extended into the first half of February, as supplies remained tight ahead of the arrival of the Thai offseason
harvest and the Vietnamese winter-spring crop into the market, " the FAO said. " Although a slow pace of offshore sales
successively capped or reverted gains, February closed with
quotations in both origins generally higher month-on-month. "
Consistent buyer interest kept Indian export values on the
rise, the UN organization said.
14

600
500
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200
100
0

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Rice (Thailand), 5% broken, white rice (WR), milled, indicative
price based on weekly surveys of export transactions,
government standard, f.o.b. Bangkok.

" Sentiment in the country was also influenced by expectations of easing port congestion following an early-month official move permitting the use of the Kakinada deepwater port
for rice exports, " the FAO said.
Prices also moved higher in Pakistan on African demand
and a Rupee appreciation, the FAO said.
" In the Americas, disappointment over a lack of US awards
in an Iraqi tender tended to steady (US No. 2, 4% broken),
despite some upward pressure from expectations of lower
US plantings in 2021 due to competition with maize and soybeans. "
US Rice said the US industry lacked faith in the prospects
of a long-term deal to increase exports to Iraq.
" By contrast, export prices subsided some more in the major South American exporters as 2021 harvests got underway
and substantial sales were confined to an Iraqi purchase of
Uruguayan rice, " the FAO said.
In its Grain: World Markets and Trade report, published
March 9, the USDA's Foreign Agricultural Service (FAS) said
that " over the past month, US and Uruguayan quotes persisted
at $625 per tonne and $620 per tonne, respectively. "
" Southeast Asian prices trended slightly lower with Thai
quotes down to $521 per tonne and Vietnamese quotes down
slightly to $509 per tonne on increased exportable supplies
with the arrival of the spring crop, " the FAS said. " Pakistani
quotes slid to $446 per tonne on muted buying interest from
traditional markets. Indian quotes held at $415 per tonne amid
with continued demand from the Bangladesh government and
private sector. "
Chris Lyddon is World Grain's European correspondent.
He may be contacted at: chris.lyddon@ntlworld.com.
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April 2021 / World Grain / World-Grain.com

US Department of Agriculture; World Bank

RICE

Monthly rice prices

(in US dollars per tonne)

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World Grain - April 2021

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