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Thai Rice Prices Reach 2-Month High Due to Increased Demand from Brazil and Mexico


Published Date: May 21, 2024
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Are you looking to Rice Suppliers S&P Global Commodity Insights reported on May 16 that a sudden boost in demand from Brazil and Mexico has caused Thailand's rice prices to soar to a two-month high. Thai Grade B rice, which costs between $580 and $600 per metric ton FOB, is sold to these nations. Shipments to Brazil are anticipated at the docks of Santos and Paranagua.

Prices for Thai rice are rising due to demand from Brazil and Mexico, according to a merchant headquartered in Dubai. Thai 5% broken white rice and 100% Grade B white rice reached a two-month high of $616/mt FOB and $626/mt FOB, respectively, according to Platts' assessment on May 16.

Brazil's Rice Crisis: Floods Devastate Crops, Boost Import Demand

Because of the catastrophic flooding in Rio Grande do Sul, responsible for about 70% of the country's rice harvest, Brazil, one of the world's top ten rice exporters, is facing a huge spike in rice demand. Brazil is predicted to source an additional 1 million metric tons of rice in 2024, with a 10%–20% risk of crop damage. Brazil is currently receiving 100,000 mt of Thai Grade B rice from major grain trading organizations. Meanwhile, because of the unpredictability of Brazilian rice supply, Mexico, which normally imports 30,000–40,000 mt of Thai rice, is turning to the United States and Brazil for its rice. Southeast Asian rice prices are rising as a result of these events.

Indonesian Tender Fuels Thai Rice Rally

The most recent contract announcement of 2024 by Indonesia's government-owned purchasing agency Bulog has also increased the price of rice in Thailand. Thailand is anticipated to furnish 90,000 mt of the 300,000 mt of 5% broken white rice that Bulog announced in a new tender on May 11. According to Bulog's announcement, the rice had to be from the 2022–2023 (July–June) crop year and processed no after six months in order to be eligible for bidding. The deadline for submissions was May 14.

As of the most recent tender release, Indonesia has issued five tenders for the import of 1.7 million metric tons of rice in 2024 for rice exporters, with the majority of the purchases coming from Vietnam and Thailand. According to Commodity Insights, Thailand, the fifth-largest producer of rice in the world, is expected to produce 20 million metric tons of rice in 2024—a 4% decrease from the previous year due to dry weather—and export 8.4 million metric tons—a steady amount assuming that India loosens its trade barriers. 

Conclusion

In conclusion, sellers looking to Basmati Rice Seller can be hugely benefited as, increased interest from Brazil and Mexico has driven up rice prices in Thailand to a two-month high. Brazil's rice output has been severely hit by the destructive floods, which has caused a spike in imports from Thailand. In a similar vein, Mexico has looked to Thailand to meet its rice demands due to supply concerns with Brazil. The recent rice tender in Indonesia has also contributed to the upward trend in Southeast Asian rice prices. The combination of these variables points to a prolonged upward pressure on the price of Thai rice in the foreseeable future.

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