Agriculture, Rice

February 07, 2025

South American rice prices plummet up to 27% on year amid harvest season

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HIGHLIGHTS

Favorable weather weighs on rice prices

Brazil faces reduced buying interest from key importing countries

Argentina and Uruguay monitoring crop quality closely

The South American rice market experienced notable price drops this harvest season due to favorable weather conditions.

In Brazil, prices for parboiled rice and white rice saw notable drops. Platts assessed Brazilian parboiled rice at $669.18/mt in January, declining 26.9% from $916.96/mt a year earlier.

Similarly, the price of Brazilian white rice 5% broken fell to $669.18/mt in January 2025 from $917.55/mt in January 2024, marking a 27.1% decrease. The price for Brazilian 100% broken rice also saw a reduction, dropping from $457.27/mt to $399.46/mt, down 12.6%.

As of Feb. 5, 2025, prices for white rice and parboiled rice (5% broken) in Brazil were assessed at $668/mt FOB Rio Grande by Platts, reflecting a notable decrease of 24.6% from $886/mt for parboiled rice and 25.4% from $895/mt for white rice during the same period last year.

The Brazilian market is currently experiencing a wide range of offers for white rice and parboiled rice 5% broken, with offers reported as low as $647/mt and up to $715/mt for February shipment.

Weather conditions played a crucial role in shaping the current market landscape. Last year, excessive rainfall due to the El Niño phenomenon resulted in significant crop damage and the need for replanting, which compromised yield expectations across Brazil.

This year, while the harvest is ongoing, traders remain cautious, noting that only a small quantity has been harvested so far. However, there is a positive outlook for a bumper crop across the region.

A Brazil-based trader said, "The market has no parameters yet; it all depends on the paddy rice prices from the farmers in Brazil, which are not coming down." Additionally, reduced buying interest from Peru, a key importing destination has added to the overall market uncertainty.

In Argentina, Platts assessed white rice 5% broken on Feb. 5 at $697/mt, representing a decrease of 12.8% from $799/mt a year earlier. In January 2024, Platts assessed Argentine white rice at $807.82/mt, which has now fallen to $698.18/mt in January 2025, indicating a 13.6% drop.

The market is currently subdued, with many sellers waiting for the harvest to stabilize prices.

Last year, Argentina faced challenges with a drought-shrunken 2023-24 crop harvest, which resulted in exports plummeting by 70% year over year in December 2023.

This year's harvest is expected to yield better quality rice, with good quality already harvested and negotiations for shipping in mid-February to March underway, according to market participants.

Additionally, there has been some buying interest from Europe for brown rice, while Venezuela has recently purchased 25,000 mt of paddy rice.

However, demand for white rice from regular importers in Brazil and Chile remains low, as both countries currently hold sufficient inventories.

Platts assessment for Uruguayan white rice (5% broken) was at $669/mt Feb. 5, down 24% from $880/mt a year earlier. The monthly average for Uruguayan white rice decreased to $689.36/mt in January 2025 from $881.81/mt in January 2024, reflecting a 21.9% decline.

A trader based in Uruguay said, "Prices are okay; everybody is waiting on the quality of the current crop." Last year, weather was also a concern, with early indications suggesting that while early rice quality may be good, late crops could fall below average due to the lingering effects of the El Niño weather pattern.

"I personally think early rice will be just good, while late crops will be below average or poor. Therefore, we could see a decrease in prices in March but an increase from April to June," the trader added.

The current market in Uruguay remains tight, with limited stocks available until new supplies arrive.

Overall, the ongoing harvest and varying quality expectations are influencing market sentiment, with traders closely monitoring developments as the season progresses.

Last year's adverse weather conditions, particularly due to El Niño, led to a more challenging market environment, impacting exports and overall supply.


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