Thai rice prices rose to $511/MT, as at 10th June, up by 8.5% from the $471/MT recorded in May, driven by a strong baht currency and persistent supply concerns over what was considered one of the worst droughts in decades. Despite recent rains alleviating some of the impact of the dry weather on the crop, the 2019/20 Thai rice production is forecast to fall significantly by 11.5% to 18 million tonnes compared to 20.3 million tonnes in the previous year. The recent high prices make Thai rice more competitive to other major exporters such as India and Vietnam, thus weighing on demand.
According to market participants, the Indian rice prices fell to their lowest in more than two months due to a weaker rupee and subdued demand. Although, the relatively low prices have not been able to support an increase in demand.
The medium-long term outlook for India’s market is even more bearish with India expected to produce a record 2020/21 crop due to a higher planted area following favourable monsoon rains. According to the USDA, Indian rice production is forecast at a record 118 million tonnes.
Meanwhile, Vietnamese prices are reported to be falling, pressured by increasing supplies from the ongoing harvest.