Vietnamese exporters have renegotiated higher prices for around half a million metric tons of rice, two trade sources said, as global prices climbed to 15-year highs following India’s ban on overseas sales last month.

This is the first confirmation of rice prices climbing in the wake of India’s surprise ban, with importers paying more for one of the world’s most widely consumed staples amid tightening supplies.

Asian rice exporters had raised offered prices by around 20% since India banned non-basmati white rice exports last month, heightening food inflation risks for some of the most vulnerable consumers in Asia and Africa who are already struggling with lower supplies due to erratic weather and the war in Ukraine.

“Buyers have agreed to pay higher prices for some of (the) cargoes which they bought for August shipment,” said one trader at an international trading company. He added that around 200,000 tons of rice have been shipped this month while 300,000 tons were yet to be loaded at Vietnamese ports.

Importers, including Indonesia and the Philippines, have paid between $30 and $80 a ton above deals signed at around $550 a ton for fragrant Vietnamese rice before India banned white rice exports in July, the Singapore-based traders said.

This gives sellers additional income of around $15 million to $40 million compared with prices agreed before India’s curbs.

The export ban by India, which accounts for 40% of world rice supplies, has taken out 10 million tons of supplies from the international market.

“Renegotiations were primarily carried out for non-basmati white rice,” said a Mumbai-based dealer with a global trading house.

“Both buyers and sellers absorbed a portion of the price increase due to the jump in local rice prices. Sellers did not raise prices to match the current market price.”
Fragrant rice from Vietnam was being offered at as high as $700 a ton but prices were renegotiated around $580-$630 a ton, traders said.

Thailand’s 5% broken rice prices RI-THBKN5-P1 are being offered at $650-$655 per ton, while the similar variety from Vietnam RI-VNBKN5-P1 is offered at $620-$630 per ton.

Thai rice prices were quoted at $545 per ton and Vietnam at $515-$525 per ton before India decided to curb exports in July.
Source: Reuters (Reporting by Naveen Thukral; Additional reporting by Rajendra Jadhav in Mimbai; Editing by Shri Navaratnam and Emelia Sithole-Matarise)

Published Date: August 17, 2023