Global prices of rice are on rise


International prices of rice are on the rise, with Thai rice trading at the highest in about three years amid growing demand from Iran.

Export prices of grade-A Thai white rice came to $492 a ton in mid-June, up 10% from a month earlier and the highest since August 2014, according to the Thailand trade commission, reports

A big buyer is Iran, which has returned to the international markets after its landmark nuclear deal with six world powers -- the U.S., the U.K., Germany, France, China and Russia -- was implemented in January 2016. U.S. and European sanctions were lifted, enabling Tehran to make international purchases more easily.

The Iranian government and corporate buyers in the country got their hands on 40,000 tons to 50,000 tons of jasmine rice and grade-B white rice recently, according to trading houses and other sources. Thai rice exporters are eagerly securing supplies for shipment to Iran, an analysis by the U.S. Department of Agriculture showed.

Thailand is one of the world's biggest rice exporters, shipping roughly 10 million tons a year to other markets. A seasonal factor is also in play. Now is the time of year when the new crop from Pakistan is not available, so buyers have flocked to Thai rice, said an official at Japanese rice and rice product company Kitoku Shinryo.

Appreciation in the Thai baht is lifting international prices as well. Seeking to assess changes in currency rates, rice exporters in Thailand have been putting off signing contracts, curbing supplies.

Tight supplies are impacting businesses in Japan. The recent shift toward upscale rice in Japan has made affordable domestically grown rice hard to come by, and snack makers are increasingly using rice from Thailand and the U.S., said a midsize producer. If Thai rice continues to trade higher, procurement costs are sure to rise. This could push up production costs for awamori, a distilled alcoholic beverage indigenous to Okinawa that uses Thai rice as a main ingredient.

Japan's restaurant industry will likely remain relatively immune to the rising prices as they focus on upmarket rice for its quality. "Even with a bit higher prices, the priority is on the taste," said an official at Meal Works, an operator of the Mango Tree chain of Thai eateries.


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