Japonica rice circulation is tight, rice prices in sales areas remain stable

In March, due to rebounding demand and tight circulation, the domestic rice grain market was steady with a strengthening trend, mainly reflected in japonica rice slowly rising, mid-to-late indica rice basically stable, and high-quality rice grain rising slightly. Rice ex-factory prices in producing areas rose slightly due to higher processing costs, while rice in sales areas remained stable.

Tight japonica rice circulation, prices steadily climbing

In March, japonica rice in Northeast China continued to rise steadily. Tight supply and stable demand were the main factors driving prices higher. As of the end of the month, in Heilongjiang, the factory-gate price of round-grain paddy with a milling yield of 70% and a moisture content of 15% was mostly 3160-3220 yuan/tonne; in the Panjin area of Liaoning, the purchase price of paddy with a milling yield of 67% and 15% moisture was mostly 3380-3420 yuan/tonne, up 20-60 yuan/tonne from the end of last month.

On the supply side, japonica rice purchasing continued. As of March 25, various grain enterprises in 7 major japonica rice producing areas including Heilongjiang and Jilin had cumulatively purchased 39.79 million tonnes of newly produced japonica rice, an increase of 6.86 million tonnes over the same period last year. The huge volume of purchasing and storage led to tight circulation in major japonica rice producing areas. With farmers' remaining japonica rice stocks bottoming out and the volume of reserve rotation being relatively small, Northeast japonica rice rose steadily in mid-to-late March.

Japonica rice in Jiangsu and Anhui also saw a marked reduction in grain sources as purchasing proceeded in depth. Due to limited purchasing enthusiasm among enterprises, Jiangsu-Anhui japonica rice prices rose slightly after mid-March, but transaction volumes were limited.

⟦NL> Mid-to-late indica rice stable, high-quality rice slightly up

As southern regions resumed work relatively early, after entering March both market processing demand and consumption entered a relatively stable period. In addition, reserve rotation had already begun in various places, and the market supply of mid-to-late indica rice could basically meet enterprise demand, so the mid-to-late indica rice trend was generally stable. However, the market still maintained high interest in high-quality rice, and the high-quality rice market remained firm with an increasing trend.

According to market information, in Hubei, the purchase price by rice processing enterprises for newly produced ordinary mid-to-late indica rice was 2660-2700 yuan/tonne, unchanged from the same period last month; the factory-gate price of the high-quality mid-to-late indica rice "Liangyou" series was 2840-2900 yuan/tonne, up 40 yuan/tonne; the rice ex-factory price was 4500-4540 yuan/tonne, up slightly by 20 yuan; the purchase price of the Huanghuazhan series was 3000-3080 yuan/tonne, and the rice ex-factory price was 4700-4760 yuan/tonne, both up slightly by 20-40 yuan/tonne from last month.

Lower processing costs, stable rice in sales areas

According to institutional monitoring, in late March the wholesale price of Northeast round-grain rice in the Beijing market was 4500-4540 yuan/tonne, and long-grain rice was around 4880 yuan/tonne; in the Shanghai market, high-quality Jiangsu japonica rice was 4500-4520 yuan/tonne, Northeast rice was 4840-4900 yuan/tonne, and ordinary Anhui japonica rice was 4200-4250 yuan/tonne; in the Guangzhou market, Northeast rice was around 4640 yuan/tonne, ordinary early indica rice was 3750-3850 yuan/tonne, and ordinary late indica rice was 4000-4100 yuan/tonne.

The above prices were basically unchanged from last month. The main reason for stable prices was that market supply expanded as enterprises fully resumed work. In addition, reserve rotation began in many regions, and enterprises purchasing low-priced paddy also reduced processing costs. At the same time, rice traders in sales areas did their best to maintain rice supply prices in order to consolidate their channels.

Fewer rice imports, international rice prices slightly down

Customs data show that in February China imported 67,700 tonnes of rice, a decrease of 71,300 tonnes year-on-year and 54,700 tonnes month-on-month; cumulative rice imports in January-February were 190,100 tonnes. In February China exported 15,100 tonnes of rice, an increase of 14,500 tonnes year-on-year and a decrease of 4,200 tonnes month-on-month; cumulative rice exports in January-February were 34,400 tonnes.

Internationally, at the end of March export quotations for Asian rice were stable to lower in most regions. According to institutional data, the FOB quotation for Thai 5% broken rice was 390 USD/tonne, down 10 USD/tonne from last month and 15 USD/tonne lower than the same period last year; the FOB quotation for Vietnamese 5% broken rice was 360 USD/tonne, unchanged from the same period last month and 35 USD/tonne lower than the same period last year; the FOB price of Pakistani 5% broken rice was 350 USD/tonne, unchanged from last month and 55 USD/tonne lower than the same period last year.

In summary, as market supply stabilises, consumer demand may shrink slightly. As reserve rotation is fully rolled out in various places, its low prices will largely curb the upside room for paddy prices, and the paddy market is expected to be mainly stable. The ordinary rice market is expected to remain stable, while high-quality rice prices will rise slightly.