Indian rice export prices rose to record high last week

Indian parboiled rice export prices rose to a record high this week on tight supplies and steady demand from Asian and African buyers, while rates for Vietnamese and Thai rice fell.

India's 5% broken parboiled rice was quoted at a record high of $533-$542 a tonne this week, compared with $525-$535 last week.

Nitin Gupta, vice president of Olam Agri in India, said that supply in the market is limited due to the government’s paddy procurement. In addition, the milling of new rice crop is currently underway, which is putting pressure on supply.

India's rice output is expected to fall this fiscal year for the first time in eight years, raising the possibility that New Delhi will extend restrictions on rice exports to control food prices ahead of elections.

Vietnam’s 5% broken rice was quoted at $630 a tonne, down from $653 a week ago. Traders said domestic supplies were increasing and the harvest had begun in the Mekong Delta, which is expected to peak in March 2024.

Trading activity has slowed as buyers are waiting for prices to fall further as supplies from the winter-spring harvest arrive, a trader in Ho Chi Minh City said.

Thailand’s benchmark 5% broken rice was quoted at $663-$665 a tonne, down slightly from $665 last week. A Bangkok-based trader said prices fell due to a weaker baht.

Meanwhile, rice prices in Bangladesh have continued to rise after a sharp increase last week, despite abundant production and record high stocks, prompting Prime Minister Sheikh Hasina to order immediate action to curb hoarding.

US agricultural market

Prices of agricultural products all fell on the Chicago Board of Trade (CBOT) in the session on January 26, led by wheat.

At the close of the session, corn for March 2024 delivery fell 5.5 cents, or 1.22%, to $4.4625 a bushel. Wheat for the same delivery fell 12 cents, or 1.96%, to $6.0025 a bushel.

March 2024 soybeans fell 13.75 cents, or 1.12%, to $12.0925 a bushel. (1 bushel of wheat/soybeans = 27.2 kg; 1 bushel of corn = 25.4 kg).

February is a crucial month for Argentina’s corn and soybean yields, while heat waves are forecast to hit Argentina over the weekend and continue through next week.

World coffee market

At the end of the weekend trading session, Robusta coffee prices on the ICE Europe-London Exchange continued their upward trend. Robusta coffee prices for March 2024 delivery increased by 18 USD to 3,269 USD/ton and Robusta coffee prices for May 2024 delivery increased by 27 USD to 3,112 USD/ton. Trading volume was above average.

Similarly, the price of Arabica coffee on the ICE US-New York floor for March 2024 delivery increased by 6.9 cents to 193.85 cents/lb and the price of Arabica coffee for May 2023 delivery increased by 5.75 cents to 189.45 cents/lb.

The price of green coffee beans in the Central Highlands provinces increased by 800-1,000 VND, fluctuating in the range of 75,900-76,500 VND/kg.

The US dollar index fell slightly after new US economic data showed the US economy grew faster than expected in the fourth quarter of 2023, raising speculation that the US Federal Reserve (Fed) will change the direction of interest rates in the first quarter of 2024.

Transporting coffee from producing countries to consuming regions has become more difficult on two of the world's most important shipping routes. The South Pacific and Oceania routes are restricted by low water levels in the Panama Canal.

Meanwhile, on the Asia-Europe route, instability in the Red Sea region, where the Suez Canal is located, has forced shipping lines to change their schedules, causing shipping costs to rise.

These developments have had a strong impact on coffee markets, in a context where inventories in major consuming markets were already lower than average.