West Africa rice prices plummet as market grapples with oversupply

The West African rice market plummeted Fec. 26 amid an oversupply, chiefly caused by India lifting export duties on parboiled rice and thin activity.

Platts, part of S&P Global Commodity Insights, assessed the price for parboiled 5% STX CFR Cotonou rice at $454/mt Feb. 26, a decrease of $51/mt from January.

India's Agricultural and Processed Food Products Export Development Authority noted a 36% increase in rice exports postpandemic. A source said that "the issue worsened following India's removal of the export duty on parboiled rice in September 2024, prompting traders to increase their orders as prices dropped, thereby contributing to the oversupply in the market."

Market participants from Benin, Togo and Abidjan have said most warehouses are now full, leaving no additional space for storage. The movement of old stock is necessary to generate renewed demand, they added.

Sources from Benin and Togo highlighted that March and April mark the cashew campaigning season in the region. While the rice market is unlikely to be significantly affected, increased liquidity may benefit the economy.

The percentage of Benin's cashew nut production processed domestically has significantly increased to 40.26% from 19%, according to the African Development Bank.

"The cashew market is quite complex. It is influenced by demand from India and Vietnam and fluctuations in dollar exchange rates," a rice importer based in Togo said.

The Central African CFA franc has depreciated by 1% against the dollar over the week to Feb. 26, market data showed.