Rice Trade Contracting Amid Exporter Restrictions

Global rice exports are forecast to decline nearly 2 percent to less than 43 million tons in 2020, the lowest in 4 years. This is largely due to export restrictions recently announced by some Southeast Asian countries and the impact of lockdown policies in numerous countries amid the COVID19 pandemic. Most notable among the rice export bans is Vietnam, the third-largest global exporter since 2013. The Prime Minister has banned exports, despite requests by exporters and domestic industry to remove or lessen the restrictions. The industry has expressed concern that restricting exports could lead to lower domestic prices and reduced the incentive for producing rice in upcoming crop cycles during this year.

Cambodia has also implemented a ban on the export of paddy and non-fragrant white rice, though fragrant rice exports are still allowed. The bulk of Cambodia’s paddy exports are to neighboring Vietnam and Thailand. China and the European Union are key import markets for its fragrant and white rice.

Meanwhile, Burma, the seventh-largest exporter, has not officially banned exports but the issuance of new export licenses has been suspended. It has implemented an export quota at 100,000 tons per month, less than half of the average export volume last year.

The second-largest exporter, Thailand, has fewer exportable supplies this year amid a drought that resulted in a much smaller dry season crop, so its 2020 exports are forecast to be slightly lower than last year. It has not placed any official restrictions, but its export prices have escalated to 7-year highs as other Southeast Asian suppliers have imposed bans.

Source: Foreign Agricultural Service/USDA 10 April 2020 Global Market Analysis