India’s decision at the end of July 2023 to suspend its exports of non-basmati white rice sent a shockwave through the global rice market. Although prices did increase by 30%, they did not skyrocket. India’s ban was quite limited, while China played a regulatory role, and Thailand and Vietnam did not take advantage excessively. While global rice prices have increased by another 10% in the first part of 2024, they are expected to contract in the second half of the year.
Interview with Patricio Mendez del Villar, researcher at CIRAD, on the occasion of the publication of the Cyclope Report 2024.
We feared the worst for the global rice market following India’s decision to suspend its non-basmati rice exports. In the end, could we say that the fear was worse than the reality?
It was a significant scare. However, India’s export ban was very limited. From the beginning, Indian authorities indicated that exceptions would be made for countries whose food security depended on their rice. They started making government-to-government agreements, with African countries being the main beneficiaries.
Overall, around 3 million tons (Mt) were exported by India under this background. Since the beginning of the year, we’ve also seen a resumption of Indian exports. The lowest point was in October and November 2023, with a 50% drop in volumes compared to the previous year. Now, we have returned to around 75% of what India exported from the same period in 2023.
Does India remain the world’s leading rice exporter despite this ban and the 20% tax on parboiled rice?
Yes. In 2023, India exported 18 Mt compared to 22 Mt the previous year. There was a decrease of 4 Mt, but this was largely offset by exports from Thailand and Vietnam.
Did Thailand and Vietnam manage to reclaim some markets they had lost due to lack of competitiveness against India?
Yes, particularly African markets. But this will be temporary. That’s why these countries didn’t hold back and didn’t excessively increase prices, as their strategy was to sell as quickly as possible before India’s return.
Did this help to avoid a significant rise in rice prices?
Yes. We are not at all in the same situation as in 2008 when prices tripled. In 2008, India completely stopped exporting for three years, while Thailand and Vietnam limited their exports but only for a short period.
Overall, we saw a 30% increase in global rice prices in 2023.
At the beginning of 2023, there were fears that El Niño would reduce rice production in Asia. Was the impact ultimately minimal?
Global supply increased by 0.5% in 2023, and consumption grew less. Specifically, China’s consumption decreased. In 2023, Beijing halved its rice imports compared to 2022, when they reached 6.6 Mt. China played a regulatory role by drawing on its significant stocks, compensating for the strong demand from the Philippines and Indonesia’s return.
What are the prospects for the second half of 2024? Will prices fall with India’s return?
We indeed expect India’s return after the election results anticipated for early June. This is what the market is anticipating. Operators expect a price drop in the second half, with India’s return and the gradual arrival of the new Asian harvest, the main one starting in September.
What is your price forecast?
At the beginning of the year, I estimated that global rice prices in 2024 would decrease by an average of 10% compared to 2023. For now, we have a 10% increase compared to 2023. However, this anticipated 10% price drop in 2024 will not compensate for the 30% rise in 2023 compared to 2022.