Agri Business

Lockdowns and export curbs limit activity in Asia’s major rice hubs

Reuters BENGALURU | Updated on April 10, 2020 Published on April 10, 2020

There was little activity this week in Asia's main rice trading hubs as a coronavirus lockdown in India hampered exports, Vietnam's ban on shipments to ensure it has enough domestic supply continued while Thai rates remained at seven-year highs.

In India, the world's biggest rice exporter, traders have stopped signing new export contracts as labour shortages, and logistical disruptions caused by the 21-day lockdown are already hampering the delivery of existing contracts.

“Rice is not moving from fields to mills and mills to ports,” said an exporter based at Kakinada.

Export prices were unavailable for a second week running.

In neighbouring Bangladesh, the government has halted the export of its common rice variety as domestic prices of the staple grain have been driven to a two-year by panic buying.

“In this situation, there is no scope to allow rice exports even though traders came up with some orders,” a commerce ministry official said on Thursday.

It was a similar situation in Vietnam, which has suspended the signing of new export contracts in an attempt to ensure domestic supplies are sufficient during the pandemic.

Vietnam's 5 per cent broken rice prices were unavailable for the third week in a row.

“There have been no transactions, and we're still waiting for the final decision from the prime minister on the resumption of exports,” said a trader based in Ho Chi Minh City.

Vietnam's Ministry of Industry and Trade asked the government earlier this week to resume rice exports but limit the volume to 800,000 tonnes for April and May.

But traders said the Ministry of Finance wants to keep the ban on white rice exports until June while allowing the export of fragrant and glutinous rice to resume immediately.

Thailand's benchmark 5 per cent broken rice prices widened to $555$580 per tonne - their highest since April 2013 - from $560-$570 last week on concerns about supply shortages due to an ongoing drought.

“The drought has really hurt supply and pushed up the prices and kept buyers away. This has been going on for weeks,” a rice trader in Bangkok said.

Rice exporters in Thailand said they were monitoring the situation in rival exporting countries.

“We're still looking at how COVID-19 is impacting exports in the main competitors like Vietnam and India to see whether a lack of exports there will increase demand for Thai rice. So far there has been no major order from overseas markets,” another rice trader in Bangkok said.

“But even if demand increases because others can't sell, the supply situation here could push up the price even further.”

Published on April 10, 2020

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.