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Vietnamese exporters raise rice prices post-Indian export ban

After India's export ban, Asian rice prices surged 20 percent, risking food inflation for vulnerable consumers in Asia and Africa due to supply disruptions.

Reuters Archive

Rice is a staple for more than 3 billion people, and nearly 90 percent of the water-intensive crop is produced in Asia, where the dry El Nino weather pattern is likely to curb supplies. / Photo: Reuters Archive

After India's prohibition on overseas sales last month, global rice prices surged to their highest levels in 15 years. Consequently, Vietnamese exporters successfully restructured agreements for approximately 500,000 metric tonnes of rice, securing elevated prices.

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 percent 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 tonnes of rice have been shipped this month while 300,000 tonnes were yet to be loaded at Vietnamese ports.

“Importers, including Indonesia and the Philippines, have paid between $30 and $80 per tonne above deals signed at around $550 per tonne 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.

India rice export ban triggers global price hike and food security worries

The export ban by India, which accounts for 40 percent of world rice supplies, has taken out 10 million tonnes 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 per tonne but prices were renegotiated around $580-$630 per tonne, traders said.

Thailand's 5 percent broken rice prices are being offered at $650-$655 per tonne, while the similar variety from Vietnam is offered at $620-$630 per tonne.

Thai rice prices were quoted at $545 per tonne and Vietnam at $515-$525 per tonne before India decided to curb exports in July.