Indian rice export rates rise to one-year high as lower rainfall fuels supply woes

Indian rice export rates hit a one-year high as drought-like conditions and limited supplies have raised fears about production, according to recent market reports. The southern Indian states are in desperate need of rainfall, or they risk seeing a sharp decline in crop productivity, according to a dealer in Mumbai.

The 5% broken parboiled variety of rice in India currently trades between $369 and $375 per ton, a sharp increase from last week's $366-$371 range. Similarly, Indian 5% broken white rice is currently priced between $364 and $369 per ton. Meanwhile, Thailand's 5% broken rice has risen to between $483 and $485 per ton, up from $465 per ton last week.

Demand for rice is strong, coming in from Malaysia and the Philippines, according to a Bangkok-based trader. There is also new demand from Iraq, bought through Turkey and Jordan, adding to market activity. The main crop rice supply is expected to arrive from mid-October to December, with no anticipated issues from the Northeast and the Chao Phraya river basin provinces.

Vietnam's 5% broken rice was quoted at $440-$445 per ton on Thursday, slightly up from $438-$442 a week prior. The Philippines, Vietnam's largest buyer, is expected to increase imports this year due to concerns about El Nino, a trader in Ho Chi Minh City noted.

However, trading activity remains relatively calm. Vietnam's August rice exports declined 36.1% year-on-year to 544,000 tons, and total rice shipments from January to August fell 4.9% to 6.04 million tons, according to government data. Elsewhere, Bangladesh's rice prices remain high despite ample stockpiles, putting ongoing pressure on consumers.

Although imports have recently helped lower wholesale prices, the benefits have not yet trickled down to retail consumers, leaving them to bear the brunt of persistently high prices.