Asia’s rice prices skyrocket after India’s export ban – as Thailand eyes an opportunity

Asian rice prices have hit their highest level in 15 years following largest-exporter India’s move to restrict shipments on the back of bad weather

Economists say Thailand, as world No 2, and No 3 Vietnam could make up some of the shortfall – but they’ll struggle ‘to fill the void left by India’

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A farmer sorts rice while working in a paddy field on the outskirts of Guwahati, India earlier this summer. Photo: AP

Published: 10:00am, 12 Aug 2023

For the first time in a decade, Vietnam-based agritech company Farm Angel didn’t buy any rice from the country’s farmers last month – it typically procures thousands of tonnes per year – after prices shot up in the wake of top supplier India’s export ban.

Since New Delhi halted shipments of non-basmati rice, and dry weather threatened output in second-largest exporter Thailand, rice prices in Asia have shot up – touching the highest levels in almost 15 years.

At nearly US$650 a tonne, regional benchmark Thai white rice 5 per cent broken hasn’t been this expensive since the depths of the global financial crisis in October 2008, according to data from the Thai Rice Exporters Association cited by Bloomberg.

In third-ranked exporter Vietnam, meanwhile, traders forecast high-quality rice could soon fetch as much as US$700 per tonne, after the per-tonne price of yardstick 5 per cent broken recently hit US$550-575, per official customs data.

Bags of rice are displayed for sale at a street market in Hanoi. Vietnamese traders say that high-quality rice could soon fetch as much as US$700 per tonne. Photo: EPA-EFE

“The price rally is likely to continue as import-dependent nations like the Philippines and Indonesia are trying to stock up,” said Vivek Sharma, co-founder of Farm Angel. “With an election around the corner [in February], Indonesia cannot take chances.”

Adding momentum to the rally are short sellers buying up shares to close out their positions – a process known as short covering or buying to cover – Sharma said.

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