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East Asia

Domestic prices of rice on the increase and higher year on year

12/05/2020

Domestic prices of rice showed significant increases in April and were well above their year-earlier levels in most countries of the subregion. This mostly reflects a surge in domestic demand and market disruptions related to the COVID-19 pandemic, including temporary export restrictions in the subregion, which were lifted at the end of the month (FPMA Food Policies) and logistical constraints. In Thailand, prices increased for the fifth consecutive month in April and were at multi-year highs, some 40 percent above the corresponding month last year. The upward pressure from tighter domestic availabilities was compounded by strong domestic and foreign demand amid the pandemic. Similarly, prices rose sharply for the second consecutive month in Viet Nam and were well above their year-earlier levels, mostly due to a reduced 2020 main “winter/spring” output, currently being harvested, which follows a below-average 2019 output. Prices increased further also in Myanmar amid tighter supplies from the reduced 2019 crop. In India, prices of rice increased only marginally, as the upward pressure from strong domestic and foreign buying, coupled with logistical constrains, was mostly offset by good market supplies from the record 2019 main season crop and expectations of a bumper 2019/20 secondary crop, currently being harvested. In Cambodia, prices changed little in April and were generally below or close to their year-earlier levels reflecting adequate market availabilities from the 2019 secondary harvest, recently completed. Similarly, in China (Mainland), supplies from the 2019 near-average output kept prices stable and close to their values in April last year. In the importing country of the subregion, prices increased sharply in Bangladesh, and were well above their year-earlier levels mostly underpinned by strong domestic buying. The Philippines also recorded some increases in prices of rice after the declines in the previous months. Prices remained generally stable in Indonesia in March amid adequate supplies from the ongoing 2020 main harvest, estimated at an above-average level. As for wheat and wheat flour, prices remained generally stable in most countries of the subregion, except in Afghanistan where they continued to increase mainly due to market supply disruptions. Prices declined throughout April in Pakistan, after an increase in the second half of March, reflecting improved market availabilities from the 2020 output, estimated at an above-average level. Incoming supplies from the 2020 “Rabi” crop, expected at a record level, kept prices generally stable also in India, although they increased in some markets reflecting harvest delays due to lockdown measures. Prices were generally stable in China (Mainland) and Indonesia, owing to adequate market availabilities and they decreased in Bangladesh, weighed by improved market availabilities from the 2020 harvest and large imports in recent months.

National policy responses to limit the impact of COVID-19 on food markets - update

Bangladesh has increased the 2020 “Boro” paddy procurement target compared to the same season last year to boost its reserves and is distributing rice at subsidized prices for the poor.

Myanmar approved, in late April 2020, a MMK 38 billion fund to procure 50 000 tonnes of rice and 12 000 tonnes of cooking oil for its State reserves.

Sri Lanka, on 10 April 2020, set its new maximum retail prices for rice and declared rice mills an essential service to ensure market availabilities (FPMA Food Policies).