The lack of export activity is catching up to the cash market where spot prices throughout the delta are unchanged or showing further signs of softening. Demand for paddy is considered weak as mills work feverishly to generate demand. With the expectation that paddy prices will edge lower as we move into in planting, buyers are generally operating with patience, and only procuring hand to mouth.
Export demand improved by 2% against last year’s numbers this week, but is still reported to be down 16% year to date. Milled shipments to Mexico are up this year, but exports to Haiti are down 13%, and are ultimately weighing on milled rice demand. Although paddy shipments are down year over year, total paddy sales are on par which is providing some much-needed support to the market.
Asian rice prices held relatively steady this week as demand continues to be muted with importers awaiting new crop. Vietnamese exports are projected to be down 31% during the first two months of the calendar year. As for India, the Rupee is causing pause among importers as they attempt to navigate volatile exchange rates.
Futures posted some small gains against last week but were generally quiet as volume shrank to the lowest levels seen in over a month. Without a rally in far contracts or a strong new crop forward cash contract, the industry’s current expectation of a significant decrease in acreage will likely hold true.