Agriculture, Rice

January 30, 2025

Weak international export demand drives Platts Asian rice prices lower

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HIGHLIGHTS

Vietnam becomes world's cheapest source for white rice as prices fall to $399/mt FOB

Thai rice prices to fall ahead of February crop, limited demand: sources

Pakistani rice prices may continue to fall as buyers await better deals

Asian assessed rice prices have plunged to multi-month lows amid weak international export demand for white rice from buyers globally, leading to intense competition among major origins, market sources told S&P Global Commodity Insights.

As buyers put immediate purchases on hold, the global rice market is experiencing increased pricing pressures, which could lead to a transformation in trade dynamics and shifts in buyer interest.

India re-enters rice market

Indian lifted a ban on non-basmati white rice exports on Sept. 28 but introduced a minimum export price of $490/mt. The following month, it removed the MEP.

India's re-entry into the market has significantly pressured WR prices across Asia. Many price-sensitive buyers have shifted their sourcing to India.

"I see a bearish trend in the Indian rice market during the first half of 2025. This trend began with India’s policy changes, which triggered a global price decline. As India led the way, other origins had to lower their prices to remain competitive. The country has a good crop this season. The Indian government is holding record-high rice stocks, with procurement ongoing until mid-February. Once left over stock becomes available for export, it will put further pressure on prices. Also, Rabi crop arrivals in Q2 will put more pressure on the prices. Given India’s substantial stock levels, the country has the capacity to supply large volumes to the global market. However, major demand could emerge from Malaysia, Nigeria, Bulog (Indonesia), Bangladesh and potentially Kenya, which might create some bullish sentiment in the market later", Nitin Gupta, senior vice president at Olam Agri, said.

While there are signs of potential demand growth from various countries, the overall market remains under strain due to supply pressures.

"There is downward pressure on both white rice and parboiled rice in India," said Umesh Jain, director of Sponge Enterprises. "Ocean freight rates are also declining -- they are around $2,200-$2,300/TEU now and are expected to drop to $2,000 by next week. With tepid demand from destination markets like Africa, prices are likely to fall to $420/mt-$425/mt FOB for parboiled rice within the next one to two weeks."

The absence of buyers has resulted in reduced international demand for WR, prompting exporters to lower prices. However, sources suggest limited declines ahead in the Indian rice market.

"Looking ahead, prices are unlikely to drop significantly -- only by $5-$10/mt for both white and parboiled rice," Utsav Agarwal, director of KLA India Public, said. "East African buyers continue to prefer Indian-origin white rice due to less freight and transit, while West African buyers may opt for Vietnamese white rice if it is priced lower than Indian offerings, given their price sensitivity."

Umesh Gosai, head of Rice Trade at Export Trading Group, said: "The Indian market will remain stable, which should help stabilize other markets as well. Prices have likely hit their floor, with a potential decline of just $10-$15/mt from current levels. The market could also rebound from here."

Platts, part of Commodity Insights, assessed Indian 5% broken white rice at a near two-year low of $412/mt FOB Jan. 30. That was the lowest price since Feb. 21, 2023, when it stood at $410/mt FOB.

India, the world's top rice exporter, is forecast to export 21.5 million mt of rice in the marketing year 2024-25 (October-September), up 49% year over year, according to Commodity Insights data.

Thai rice prices hit more than two-year low

The Thai rice market is also experiencing a bearish trend following significant price drops at other origins.

Wanniwat Kitireanglarp, deputy secretary general of the Thai Rice Exporters Association, said: "Prices will have to go down further. Our new crop is coming around Feb. 3, and it looks good, so we don't see any upside.

"Plus, with the [Lunar] New Year holiday across the region, demand is expected to pick up gradually from mid-February," he said. "Buyers are ready but want to ensure prices have hit the bottom.

"Vietnamese prices have already reached or are very close to the bottom at $375-$380/mt for 5% broken white rice, while Thailand, Pakistan and India still need to come down to that level. I expect buying activity to pick up in the $390-$410/mt FOB range."

Demand remains sluggish, particularly due to Indonesia's absence from the market, and buyers in the Philippines are waiting for lower prices.

A Bangkok-based source said that while Indonesia is not in the market, South Africa is making some purchases, Malaysia appears to be sourcing only from Pakistan, and demand from West Africa is slow. The source added that if Indian rice prices decline further, Thai prices are likely to follow, maintaining a differential of $30-$40/mt, provided there is no strong demand. Meanwhile, buyers in the Philippines are holding off, anticipating lower prices.

Despite being one of the highest prices for 5% WR among Asian origins, Thai rice prices were assessed at $434/mt FOB Jan. 30, the lowest level since Nov. 30, 2022, when they stood at $429/mt FOB.

Vietnamese rice prices now lowest in Asia

Reduced export demand has resulted in price drops, making Vietnamese white rice the cheapest in the world.

A Vietnamese seller said Vietnamese white rice prices were already at rock bottom, with paddy being purchased below production costs. Farmers are suffering heavy losses due to low paddy prices for white rice.

Some farmers may consider switching to other crops. A source based in Ho Chi Minh City said Indonesia has not been active, and demand from the Philippines has fallen 40% due to ongoing policy changes for rice importers.

"Looking ahead, demand is expected to remain weak until March, while supply stays steady for now," the seller said. "The winter/spring crop in March and April is expected to bring good supply since farmers planted when paddy prices were high. However, for the summer/autumn crop in July and August, many farmers will sell their winter/spring paddy at low prices and will be dissatisfied. As a result, some may shift to other crops instead of rice, potentially reducing future supply."

Platts assessed Vietnamese rice prices at $399/mt FOB Jan. 30, the lowest they have been since $385/mt FOB on Sept. 12, 2022.

Demand from the Philippines, the world's top rice importer and a key buyer of Vietnamese rice, has been hindered by uncertain government rice import policies.

A buyer based in Davao said Philippine buyers may start purchasing small volumes after the Lunar New Year. "Looking ahead, Vietnam's main competition in the Philippine rice market is likely to come from Pakistan and India, as their rice has already gained acceptance in the country," the buyer said.

Another Davao-based importer said demand from the Philippines was low "because of confusing government policies and congress investigations targeting the rice trade."

Pakistan's market adjustments

In response to rapidly falling prices in other exporting countries, Pakistani exporters have adjusted their WR offers downward.

"The market in Pakistan might drop further since prices in Vietnam are lower and Indian prices are expected to fall as well," a Karachi-based market participant said. "Buyers for WR are inactive and sitting back expecting even lower prices. If the market remains weak after March, Pakistan could see lower prices as compared to current levels."

Platts assessed Pakistan 5% WR at $414/mt FOB Jan. 30, the lowest price since Nov. 18, 2022, when it was$410/mt FOB.

Myanmar's weak demand

The Myanmar rice market is experiencing weak demand, mirroring bearish trends in other exporting regions.

Key buyers such as Europe, the Philippines, Indonesia and Bangladesh have shown little interest in Burmese WR, according to market sources.

A Myanmar exporter said the country would gradually align with other WR exporting countries that facing bearish trends. "While previous shipments to buyer destinations are being fulfilled, the anticipated increase in crop supplies by the end of February and into March is likely to create additional supply pressure on prices, further dampening market sentiment," the exporter said.

Platts assessed Myanmar 5% WR at $444/mt FOB FCL Jan. 24, the lowest price since $439/mt FOB on Jan. 27, 2023.


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