| From the desk of Subra V. Last weekend was a busy weekend, starting on the 27 September evening when we saw an announcement from India declaring a reduction in duties for rice in husk (HS code 10061090), husked brown rice (HS code 10062000), and parboiled rice (HS code 10063010) and this effectively cut Indian parboiled rice prices by about $50 PMT. The announcement also revealed a zero duty for non-basmati white rice (HS code 10063090) added to the removal of the Minimum Export Price for Basmati rice exports a week ago. This news was quickly followed by a 28 Sep 2024 announcement that white non-basmati rice (HS code 10063090) was no longer banned and the export policy was described as “Free” but with the condition of a Minimum Export Price (MEP) of USD $490 PMT (which we assume to be for FOB value). This set about a shift in global (mostly Asian) markets, as prices started to slide. It is also noted that broken rice remains banned from exports from India, so the white rice ban removal and duty reduction from India on parboiled and husked rice and husked brown rice were the main results. This decision has left markets faced with a strong Indian supply, as improved overall global exportable supplies from Asia are seen to test markets for lower prices. Buying interest is rising, and there are questions as to how Indian exports will show in markets, even the lower-quality white rice segment faces pressures from India’s potential to supply, especially in African markets. There are already a number of unverified suggestions of Indian prices below the MEP being made available for a suite of white rice offerings (in quality and variety), while a rising demand for this Indian offer, is already underway, at market best prices, and consequently leaving most Asian markets weaker in price. Strong Indian stocks (rice stocks are at (31.23 MMT) and at record levels, the highest in 20 years and a relatively weak demand for OMSS sales of stocks to the market also means there is a chance of further adjustments and removal of restrictions which some market watchers consider possible. Current prices we have for Indian prices show PB 5% at $495 PMT (including a 10% duty), MEP at $490 PMT for all grades of white rice, while unverified sources provide us a range of $440 PMT to $477 PMT for a suite of Indian white rice offerings being made available to selected buyers at destination. For now, Pakistan and Myanmar prices offer the strongest competition to India, while Thai and Viet white rice prices have also slumped. Editor's Note: While this news will shake the rice market in the Eastern Hemisphere, the effects will be a bit muted in the Western Hemisphere. Prices out of South America remain strong, and pricing out the U.S. for the new crop has been steady. We are still waiting for significant exports to ramp up to really establish price direction, but with India now flooding the market, it is difficult to predict that prices will be firm when coupled with the large crop. This week the news of India will carry the day, but next week we will look into the port strikes and their impact on rice exports. |  V Subramanian is the co-founder, along with Sue Huong of SSResource Media and publishes SS Rice News Network, covering market intelligence across all major rice markets, particularly throughout Asia. Subra spoke at this year’s Rice Market & Technology Convention in Cancun, enlightening participants on the realities of Southeast Asian exporters with a focus on India. SS Rice News Network publications can be found at www.ssricenews.com Read the most recent edition of SS Rice News Related Articles: Bloomberg: Rice Prices Plunge Most in 16 Years After India Eases Export Curbs FAO Rice Price Update: October 2024 |
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