Peak Rice.
The exchange agricultural market is returning, judging by the results of yesterday's trading, to a reaction/response to profile factors.
Wheat quotes went up quite sharply, on the basis of reports of a possible non-tariff restriction on exports from Russia. In addition, the forecast of regional experts for wheat exports from Russia in March is 1.4-1.8 million tons, against 4.8 million tons last year. This is a monthly minimum since 2020. The factor, of course, is not a balance one, but it is very emotional.
And in general, wheat exports from Russia from the beginning of the season to the end of January are a record - 32.2 million tons, which is even higher by 0.4 million tons than last season. With a total estimated export of 40.5 million and the expected March, it turns out that the export potential for the remaining 3 months is 6 million tons. Significantly lower than last year's 11 million tons.
The WASDE balance due out today may calm the wheat bulls somewhat due to the increase in the harvest estimates in Australia and Argentina.
Otherwise, we expect a further moderate rise in quotes, although in the real market, according to the information available to us, the price growth has stopped.
A sharp and understandable move in the rice market. Quotes soared by 6.2% on Friday and Monday.
The Indian government on Friday evening allowed the export of 100% broken rice after stocks reached a record high in early February, nine times higher than the target.
India banned the export of 100% broken rice in September 2022, and then imposed restrictions on the export of all other rice varieties in 2023 after the developing drought raised concerns about the harvest. According to the Food Corporation of India (FCI), as of February 1, government rice stocks, including unpolished paddy, stood at 67.6 million tonnes, compared to the government's target of 7.6 million tonnes.
This jump is due not only to the export ban, but also to an increase in the harvest. Compared to the previous season, the harvest is expected to increase by 8 million tonnes, and carry-over stocks are expected to be 2 million tonnes. This means that concerns about food security can be left in the past.
This is partly why the export ban was lifted. In addition, it is necessary to free up storage facilities before the new harvest.
Interestingly, Indian broken rice is currently offered at $330 per tonne, compared to $300 from competing suppliers (Vietnam, Myanmar and Pakistan). The high price of Indian rice is a consequence of the inertia of the export ban and the disruption of traditional logistics.
According to traders, these countries have limited stocks. As they are depleted, buyers will switch to India, exports will be streamlined and exports from there will increase in the coming months.
The ban on exports of 100% broken rice from India in September 2022, extending restrictions to ordinary white rice in 2023, led to an increase in world rice prices from about $ 450 per ton to a peak of $ 700 per ton.
Prices have recently fallen sharply. Vietnamese and Thai 5% rice have fallen in price by 38-45%, while prices in Vietnam have fallen from a peak to $ 390-400 per ton. Unique dynamics in 1.5 years
Analysts expect rice prices to stabilize before the end of the season. The projected increase in world production by 10 million tons will be offset by the expansion of rice use in bioethanol production, as well as a steady increase in demand, since population growth is mainly in countries where rice is a staple food.
#Wheat #Russia #Non-tariffRestrictions #AcceleratedExport #Rice #India #LiftingBan #BrokenRice #PriceCollapseRise #RealMarket