Home Economy Global Rice Traders Hike Prices …Cite High Duties On Shipment

Global Rice Traders Hike Prices …Cite High Duties On Shipment

by newsmanager

NEW DELHI, INDIAN: Top exporter India’s rice export prices rose early March as traders factored in higher duty on rice shipments, while demand remained lackluster in Thailand.

India’s 5% broken parboiled variety was quoted at US$550-$558 per ton recently, shapely increased from in March, 2024, $543-$550. Since March, prices hit a record high of $560.

“We’ve had to raise prices since the government is considering the total transaction value instead of Free on Board (FOB) value to calculate the 20% export duty. This has pushed our export prices higher,” said a New Delhi-based dealer with a global trade house.

New Delhi imposed a 20% export duty on parboiled rice exports in August 2023 to control domestic rice prices.

Indian exporters have received notices from the customs department demanding payment of duty differentials on rice exported in the last 18 months, four exporters told Reuters, a rare tax demand that could cripple rice shipments from India.

The Indian Government has added another 4% this year, totaling 24% taxes to ship rice from India.

India is the world’s largest rice exporter, accounting for more than 40% of global shipments. Apart, from the recently ban higher-grade basmati rice – India’s best-known variety– non-basmati white rice accounts for about 25% of exports.

Other factor that led to the Indian Government in rice taxes on rice export has to do with climate change.

Rice prices have surged to their highest levels in a decade, marking a 14% increase since 2023 June.

The situation is primarily caused by warmer, drier weather and erratic rainfall damaging rice production throughout Asia.

In the past months, torrential rains and floods in northern India, for example, have damaged many rice fields.

Also, Thailand’s 5% broken rice prices was quoted at $585-$590 per ton, slowly went up recently to $598.

Another Asian nation, Vietnam’s 5% broken rice was offered at $590-$595 per metric ton, remain the same for now.

“Exporters have slowed down their purchases from farmers after an U.S. forecast saying earlier this month that the Philippines might reduce its imports this year on rising domestic supplies,” a trader based in Ho Chi Minh City said.

The Philippines is Vietnam’s largest rice export market.

Meanwhile, rice prices in the United States have are also on rise. According to the U.S. Bureau of Labor Statistics, prices for rice are 93.90% higher in 2024 versus 1997 (a $1.27 difference in value).
The current national average price is $1.35 for “Rice, white, long grain, precooked (cost per pound/453.6 grams)”. This data is collected by a national survey and can vary from region to region.
In the US, between 1997 and 2024: Rice experienced an average inflation rate of 2.48% per year. This rate of change indicates significant inflation.

In other words, rice costing $1.35 in the year 1997 would cost $2.62 in 2024 for an equivalent purchase. Compared to the overall inflation rate of 2.48% during this same period, inflation for rice was higher.
With these global rice traders hiking the prices of rice, which is Liberia’s staple food, reports say this could lead to local price increment here as well.

These international constraints might compel other rice traders in Africa to follow suit, as one student of the University of Liberia, Michael Wleh, puts it, Liberian government should begin to engage rice traders before the country experience artificial shortage aimed at profiteering. Source, The Economic Times.

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