Prices for Thai rice remained near a four-month high this week, aided by domestic demand, while traders in Asian hubs expressed concern about the emergence of the El Nino weather pattern and its hit to production this year. 

Rice Prices 

Thailand's 5% broken rice prices increased to around $500 per tonne from $498-$500 last week, the highest level since January. A Bangkok-based trader mentioned, “Prices have risen due to more internal demand.” 

Another trader opined that prices should remain high for some time despite the strong baht because the new harvest is taking some time to be released and because there may be less production from other nations due to climate-related risks. On Thursday, 5% broken rice from Vietnam was offered at $485-$495 per tonne, unchanged from the previous week. 

Due to weak demand and the rupee's decline to its lowest level in two months, India's 5% broken parboiled variety was quoted at $374 to $378 per tonne, down from last week's $376-$380 range, which was a record low since December. An exporter based in Kakinada in the southern state of Andhra Pradesh claimed that despite the rupee's depreciation enabling traders to lower export prices, demand is still weak. 

Factors Affecting Rice Production 

The potential onset of El Nino, when ocean temperatures in the central and eastern Pacific Ocean rose above normal, sparked global concerns about crop production. Traders in Vietnam have also warned of negative effects on global rice production this year.

A trader based in Ho Chi Minh City mentioned, “Domestic supplies are running low, while demand stands high.” He also added that, “output from other rice producing countries, Myanmar and Pakistan, are lower this year.” Meanwhile, farmers in some Mekong Delta provinces have begun sowing for the summer-autumn crop, according to a trader. 

The El Nino phenomenon may also have an impact on India's crucial monsoon season. 

According to officials from the agriculture ministry, the cyclone that struck Myanmar and Bangladesh this weekend had no effect on Bangladesh's rice production. This is good news for the nation, which is struggling with high rice prices. 

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