Indian Parboiled prices hit nearly three-year low amid fresh crop arrivals

Indian 5% parboiled rice prices dropped to a near three-year low on May 9 due to the arrival of fresh rice crops in the market, market sources told Platts, part of S&P Global Commodity Insights.

Platts assessed the Indian PB 5% price at $366/mt FOB on May 9, down $19/mt month over month. The price was last lower on Aug. 2, 2022, at $365/mt FOB.

"New crop arrivals have begun, putting downward pressure on parboiled rice prices, which are currently priced at $370/mt FOB. Additionally, the release of the Chhattisgarh tender and the government's Open Market Sale Scheme (OMSS), under which 2.8 million mt of rice is being allocated for ethanol production, are contributing factors. These moves indicate the government's intent to liquidate surplus stocks. Coupled with weak demand from key destination markets like Cotonou, there is a strong likelihood that prices may decline further," Nitin Gupta, Senior Vice President at Olam Agri, said.

Mirroring similar sentiments, Mukesh Jain, President of The Rice Exporters Association Chhattisgarh, said, "Harvest pressure of Rabi crop from Chhattisgarh is here. While demand from major destination markets like Benin remains low for bulk ships. Local prices from Raipur have fallen to Rupee 29000/mt ($340/mt) for Vizag delivery. Supply of paddy is more currently, which is why Parboiled 5% prices are coming down."

As of May 9, India PB 5% is assessed at a discount of $44/mt to Thailand and $51 to Pakistan.

While new crop harvest pressure is there, rupee weakening against the dollar led to exporters lowering their offers by $10-$15/mt during the week, with sources citing tepid demand and oversupply in the destination markets.

Amid India-Pakistan tension, there are chances of an increase in freight, which is likely to pressure FOB prices as demand for bulk shipments hasn't rebounded yet, a West-Africa-based trader said.

India is forecast to export 22.5 million mt of rice in the marketing year 2024-25 (October-September), up 56.25% year over year, according to Platts data.