World Grain - April 2022 - 16

GRAINMARKET REVIEW
RICE
Prices pulled higher by strength
of other grains, oilseeds
by Chris Lyddon
Rice is, perhaps, the grain least likely to be affected by Russia's
invasion of Ukraine. Nor is there a major impact on producers,
exporters or consumers. However, strength in prices
across the grains and oilseeds index, because of the major role
of both countries in the wheat market and that of Ukraine in
sunflowers, has crossed over to rice, pushing prices up, although
ample supplies have held back the increase.
Speaking to the European Parliament's Agriculture Committee
in Brussels, Belgium, on March 22, Michael Scannell,
one of the European Commission's top farm sector officials,
explained that the war in Ukraine " adds further to the very
substantial increase in input costs over the past year. "
" The rice sector has not been immune, but it is not as vulnerable
as certain other sectors, " he said.
Russia has exported rice to the European Union in the past
year, but the level of shipments has latterly fallen to low levels,
coming to below 16,000 tonnes in 2021. Scannell also explained
that high wheat prices could create demand for lower
quality or broken rice for certain parts of the food processing
sector.
The International Grains Council (IGC) said in its March
17 Grains Market Report that rice prices had firmed by 1%
over the previous month " amid broad-based gains in grains
and oilseeds values. "
" Although the Russia-Ukraine conflict had little direct impact
on demand, market sentiment was underpinned by expectations
that rising wheat and maize prices could support
future rice consumption, including of 100% broken in feed
mixes, " the IGC said. " In Thailand, 5% broken gained $4, to
$409 fob Bangkok, with Vietnamese 5% $26 higher, at $418
fob Ho Chi Minh, as support from local government purchasing
more than offset pressure from winter/spring crop
harvesting.
" Amid ample supplies, Indian 5% broken was little changed
at $349, albeit with gains registered for 100% broken. "
The London, England-based Council also looked separately
at the individual grains and oilseed sectors in Ukraine and
Russia, including rice.
" Largely cultivated in Krasnodar, production in rice in Russia
is relatively meager compared to global volumes, averaging
about 700,000 tonnes per annum in recent years, " the IGC
16
Monthly rice price
(in dollars per tonne)
100
200
300
400
500
Aug 21 Sep 21 Oct 21 Nov 21 Dec 21 Jan 22
Rice (Thailand), 5% broken, white rice, milled, indicative price
based on weekly surveys of export transactions, government
standard, fob Bangkok.
said. " Domestic consumption has also been broadly steady,
with rice not a staple in Russian diets.
" While exports are modest, Russia produces japonica (medium-grain)
rice, with Turkey and CIS countries typically the
largest buyers, although volumes have trended lower, likely
on increased competition from Chinese supplies. "
With only nominal production, consumption and export
volumes, rice occupies a very minor role within the grains
economy of Ukraine, the IGC said.
In its Rice Price Update of March 4, the United Nations
Food and Agriculture Organization (FAO) said prices had
risen by an overall 1.1% in February, reaching an eight-month
high, although still 11.6% below the levels of a year earlier.
" Although Indica prices also edged up by 0.9%, aromatic
quotations registered the sharpest increase last month, " the
FAO said. " They rose 2.5% above their January levels, influenced
by currency movements, purchases by the Islamic Republic
of Iran and expectations of a pick-up in buying interest
from other Near East Asian destinations.
" By contrast, a relapse in demand caused glutinous prices
to shed 1.4% of their value, while Japonica quotations tended
to move little. Although developments in the Black Sea region
toward the end of the month raised questions about their
potential impacts on the rice sector, including through the energy,
transport and agricultural input fronts, a well-supplied
global rice market and generally lackluster trading activities
limited upward pressure on Asian Indica quotations during
February. "
Chris Lyddon is World Grain's European correspondent.
He may be contacted at: chris.lyddon@ntlworld.com.
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April 2022 / World Grain / World-Grain.com
Source: World Bank; US Department of Agriculture
http://www.World-Grain.com
World Grain - April 2022

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