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Informist, Friday, Oct. 11, 2024

MUMBAI – BMI, a unit of Fitch Solutions, has cut its forecast on the average price of second-month rough rice futures contracts on the Chicago Board of Trade in 2025 by 6.3% to $14.85 per 100 pounds, due to the easing of export restrictions by India and good crop conditions and harvests in the US.

The research firm has also trimmed its average price outlook for 2024 to $16.35 per 100 pounds from $16.50, which would see average prices hover around current levels in the remainder of 2024. On Oct. 04, second-month rough rice futures contracts on CBOT closed at $15.25 per 100 pounds after averaging $15.32 per 100 pounds over the previous month, BMI said in a report.

Last month, the Indian government eased rice export restrictions by repealing a ban on non-basmati white rice exports and reducing the duty on parboiled rice exports to 10% from 20%. India also removed the minimum price of $950 per tonne on basmati rice exports. The move increased international export supplies and reduced international rice prices, which would weigh on overseas demand for US rice, exerting downward pressure on rice export quotations, BMI said.

In the week ended Oct. 6, 86% of the US rice crop had been harvested, compared to 80% a year ago, and a five-season trailing average of 77%, it said. The US Department of Agriculture forecasts that the US rice harvest will amount to 7 million tonnes in 2024-25, a four-season high, which could lead to stock accumulation amid a decrease in export sales, it said.

According to BMI, the international rice sector will generate a production surplus of 6 million tonnes in 2024-25. This is sharply higher than the International Grains Council's forecast of 3.1 million tonnes and the US Department of Agriculture's forecast of 3.2 million tonnes. The world's rice production will rise by 1.3% in 2024-25 to 528 million tonnes, while the total rice consumption will rise by 0.2% to 522 million tonnes, BMI said.

The rice market will continue to be in surplus till 2027-28, even with the risks of sudden unfavourable weather conditions in major producing markets, which may result in deterioration of the net position of rice production within a single season, BMI said. End

US$1 = INR 84.06

Reported by Shreya Shetty

Edited by Saji George Titus

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