World Grain - February 2019 - 18

GRAINMARKET REVIEW

RICE

A quiet market drifts lower

Rice export prices
(in U.S. dollars per tonne)
600
540

by Chris Lyddon

480

The international rice market largely has drifted lower in recent
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reports, unavailable because of the government shutdown, has
left traders with limited information.
In its Rice Advocate publication for Jan. 17, the U.S. Rice Producers Association reported on a slow week in the industry, with
only minor changes in price and even fewer changes in market
fundamentals.
"With the government shutdown still in full effect, the standard
publications that are used for federal information remain unavailable," U.S. Rice said. "To that effect, the market itself it essentially operating 'blind' with respect to export volumes and crop
projections."
Trade has continued despite the lack of information.
"Export sales have continued to move, and while there are no
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sales and loadings have continued apace with the earlier trends,"
the association said. "Similarly, the world market price estimate
has not been updated, but with the miniscule changes in the underlying factors, it is reasonable to expect that the WMP numbers
will not show any major adjustments when the government resumes its role.
"Asian benchmark prices have generally been sideways with
the up and down movement that is generally associated with currency exchange rates. U.S. cash prices are holding moderately
steady across the rice growing regions primarily due to producers
not being willing to trade at the lower levels."
Growers were moving only small volumes.
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as producers are content to hold out for higher prices," the association said.
On Jan. 10, reporting on its Food Price Index for December,
the United Nations Food and Agriculture Organization (FAO)
said that "international rice prices subsided for the sixth successive month, pressured further by a quiet pace of trade."
It contrasted the fall with rises in wheat and corn. In commentary on its Rice Price Update for December, the FAO said that
its All Rice Price Index (2002-04=100) averaged 213.8 points in
November 2018, down 1.2% from October and a 14-month low.
"Last month's decline was the result of a 1% fall in the Higher
and Lower Quality Indica Indices and a 2.4% retreat in Japonica
quotations," the FAO said. "By contrast, the Aromatica Index
rose by 1.3%, underpinned by expectations of reduced fragrant
harvests in India and Thailand, along with a strengthening of the
Indian rupee."
The FAO said that with a few notable exceptions, November
quotations of Indica rice were seasonally down across much of
Asia.
"Prices faltered the most in Pakistan, sliding to 23-month lows,

420

Nov 18

Oct 18

Viet 5%

Sep 18

Aug 18

Pak Irri 25%

Jul 18

Jun 18

May 18

Thia 100% B

Apr 18

Mar 18

Feb 18

US 2/4$

Jan 18

Nov 17

300

Dec 17

360

Thai A1 Super

Source: Food and Agriculture Organization of the United Nations

as new crop arrivals compounded on downward pressure exerted
by lackluster demand and another Rupee depreciation," the FAO
said. "Thai quotations also took a downturn, amid improved supplies from new crop harvests and heightened competition for
markets. Instead, public domestic purchases and currency movements sustained an uptick in Indian offers, despite a late-month
government decision extending a 5% duty credit scrip to nonbasmati exports for four months."
In Vietnam, the expectation of sales to the Philippines kept
price gains going, although the market was otherwise quiet.
"In the Americas, Indica values held broadly steady in Argentina, the U.S., and Uruguay, while U.S. medium-grain prices
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sales in the Far East," the FAO said. "Quotations also softened in
Brazil, pressured by subdued local demand and a weaker real."
Prices were 2.2% lower in November 2018 than a year earlier, according to the FAO's index. Prices for January-November
were 9.7% higher on the January-November 2017 level.
In its Grain Market Report at the end of November, the International Grains Council forecast record world rice trade in
2019, at 49 million tonnes, a year-on-year increase of 1 million,
on demand from Africa and Near East Asia. It reported white and
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pressure from new crop arrivals and generally slow demand in
Asia."
Prices in Thailand had come under pressure from sentiment on
new crop supplies with 5% broken export values down by $8, to
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and hopes of sales to the Philippines, while fob quotations in India and Pakistan were softer on rising new crop supplies.
Chris Lyddon is World Grain's European correspondent.
He may be contacted at: chris.lyddon@ntlworld.com.
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World Grain - February 2019

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