Increased import demand is pushing global rice prices up again.

Thai export rice prices reverse course and fall, while Vietnamese rice prices remain stable at high levels. Export rice prices - A week of significant fluctuations.

Many countries continue to increase rice imports.

According to FAO experts, rice is the main food source for more than 3.5 billion people and provides about 20% of the global energy supply. However, recent global changes due to geopolitical shifts and climate change have affected the supply of this commodity. Meanwhile, the demand for rice imports in late 2023 and 2024 is projected to continue to increase.

In Asia, the markets with the highest demand for imported rice currently are Indonesia, the Philippines, and Malaysia. “Given the tightening supply (India has not eased its ban on exports of common white rice until the end of 2024), the market before Christmas and Ramadan (the Muslim fasting month) will boost demand for rice in Asian countries. Meanwhile, Asian demand mainly comes from Indonesia, the Philippines, and Malaysia,” said Mr. Subramanian from SSRESOURCE MEDIA (Singapore).

The demand for rice imports has increased significantly in many countries.

Not only in Asian countries, but also in Europe, the demand for rice imports has increased significantly in many countries. For example, in Italy, according to Mr. Renzo Moro from the Italian Embassy in Vietnam, Italy is the leading rice producer in Europe, accounting for about 5% of the bloc's total rice production. Approximately 40% of the rice grown in the country is used for processing. However, the size of the Italian rice market is expected to increase from US$2.23 billion in 2023 to US$2.83 billion in 2028.

This stems from the increased demand for rice from countries importing rice from Italy and domestic rice consumption. Therefore, through the EVFTA agreement, Italy is increasing its rice imports from many countries, including Vietnam.

Rice prices are back on an upward trend.

Increased import demand from various countries has "heated up" the global rice market, which had been sluggish for over a week. Data from the Vietnam Food Association (VFA) shows that export rice prices from global suppliers, including Vietnam and Thailand, have rebounded after a period of stagnation.

Accordingly, the export price of Thai rice has been adjusted upwards by 2-20 USD/ton compared to December 8th. Specifically, 5% broken rice increased sharply by 20 USD to 643 USD/ton; 25% broken rice increased by 13 USD to 581 USD/ton; and 100% broken rice increased slightly by 2 USD to 486 USD/ton.

Similarly, Vietnamese 5% broken rice also saw a slight increase of $5/ton, reaching $663/ton after a decrease last week. Prices for 25% broken and 100% broken rice remained stable.

Pakistani rice, however, bucked the trend, falling slightly by $5, from $598 per ton to $593 per ton.

The Vietnam Food Association (VFA) explains the sharp increase in Thai rice prices as being supported by large import demands from Southeast Asian countries such as the Philippines, Malaysia, and Indonesia. In addition, low Vietnamese rice stocks and the absence of Indian imports have also contributed to Thailand becoming the dominant supplier in the white rice segment currently.

However, most traders have already booked their shipments until the end of December 2023, so some exporters are temporarily suspending white rice price offers and are now focusing on procuring raw materials to fulfill signed contracts, while others offered higher prices at the beginning of the week and then lowered them towards the end of the week due to the weakening Thai baht against the US dollar. In addition, the Thai Rice Millers Association has continued to raise its domestic guide price for 5% broken white rice – also contributing to supporting the country's rice export market.

Meanwhile, in Vietnam, many businesses share that the country's rice supply continues to be limited and they will have to wait until early March 2024 for the winter-spring rice harvest. "Export prices are currently very high, but we don't have enough stock to sell. Signing new contracts also requires careful consideration to avoid risks," said Mr. Phan Van Co, Marketing Director of Vrice Co., Ltd.

In 2023, rice exports increased sharply amidst a volatile rice market. India, a leading rice exporter, restricted exports, which contributed to a surge in rice supply from Vietnam.

In the first 11 months of 2023, Vietnam's rice exports are estimated to have reached 7.75 million tons in volume and $4.41 billion in value, representing increases of 16.2% and 36.3% respectively compared to the same period in 2022. The average export price of rice in the first 11 months is estimated at $568 per ton, an increase of 17.3% compared to the same period. Notably, Vietnam's rice exports to all three markets – the Philippines, Indonesia, and Malaysia – increased sharply. Exports to the Philippines reached 2.6 million tons, equivalent to $1.4 billion; to Indonesia reached 1,123,357 tons, with a value of $614.676 million; and to Malaysia reached 391,209 tons, valued at $201.599 million.

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