Rice stable as Ukraine war hits global wheat, corn prices

Rice quotes have remained remarkably stable amid sufficient supplies and no disruptions to major exporters even while global grain markets have been significantly affected by the Russian invasion of Ukraine and the near-complete cessation of Ukraine grain exports.

Ukraine is a major wheat and corn exporter, and the war has resulted in a sudden shift of demand to other suppliers and a remarkable increase in exporter price quotes for those grains. While Ukrainian quotes are no longer available as the country scrambles to begin shipping via rail instead of by sea, Russian wheat quotes and exports have resumed, resulting in some leveling off of prices.

Corn export quotes have eased slightly with the imminent South American harvests but remain historically high, the USDA said in its latest monthly report.

In fact, quotes from India, the largest rice supplier, have been static and are currently below major
export quotes for both wheat and corn, an anomaly. Over the past couple of decades, major wheat
exporter quotes only exceeded rice briefly in 2007 and 2008, and major corn exporter quotes have
never been above rice.

The recent phenomenon of stable rice prices and higher wheat prices may impact consumer choices, the USDA said, adding that countries that consume wheat as their staple grain are unlikely to suddenly change buying habits, but countries with consumers of both staples may prefer rice based on the comparatively lower prices.

Sub-Saharan Africa is a price-sensitive region that consumes roughly equal amounts of both grains and may shift consumption to the lower-priced rice or local alternatives, the USDA said.

Though rice is not usually used for feed due to its typically higher prices and less favorable nutritional
profile, the use of small amounts for feed is not uncommon in large rice-producing countries, especially
in East and Southeast Asian countries like China, South Korea, Japan, and Thailand, the USDA added.

This year, China and Vietnam are importing significantly more broken rice that could be used for feed, it pointed out.

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