As a case in point, Myanmar, the world's sixth largest rice exporter, announced new export licensing requirements while the Philippines has put in place price ceilings to cap retail rice prices.
All of these actions have occurred as a strengthening El Niño threatens to cut rice production of key Asian suppliers and push prices higher.
World supply-demand outlook
WHEAT production in 2023 raised m/m on higher yields in Ukraine and the Russian Federation thanks to continued favorable weather, but still falling by 2.3% below last year's level.
Utilization in 2023/24 trimmed m/m but still rising slightly above the 2022/23 level due to rising food consumption which is seen offsetting a decline in feed use.
Trade in 2023/24 (July/June) still set to decline from the 2022/23 level and unchanged this month as an upward revision to the Russian Federation's expected sales was offset by downwards revisions to Australia and Canada's exports.
Stocks (ending in 2024) lifted m/m on upward revisions to inventories in Ukraine and the Russian Federation stemming from higher production forecasts.
MAIZE production forecast for 2023 lifted slightly m/m, mostly on a higher estimate for Brazil, and set to surpass last year's output by 4.3%.
Utilization in 2023/24 unchanged m/m and forecast to increase by 1.6% largely reflecting a rise in feed use (especially in China, Brazil, and the US).
Trade in 2023/24 (July/June) forecast to fall by 1.6% and little changed this month as an upward revision for sales by Brazil was balanced by downward revisions for Paraguay and the US.
Stocks (ending in 2024) raised slightly m/m, on higher inventories in Brazil and the US, pointing to a rise of 6.8% above opening levels, with most of the increase concentrated in the US.
RICE production in 2023/24 essentially unchanged m/m, as small downgrades namely for Bangladesh, Nigeria and the Philippines are compensated by improved output prospects mostly for the US and Cote d'Ivoire. Utilization in 2023/24 still seen stagnating at the 2022/23 reduced level, as continued cuts in non-food uses offset a population-led increase in food intake.
Trade in 2024 trimmed m/m, largely on lower than previously anticipated imports by African countries, in particular Cote d'Ivoire and Niger.
Stocks (2023/24 carry-outs) raised marginally and now seen expanding by 1.7% y/y to a fresh peak. Regionally, however, stock replenishments predicted to be largely confined to Asia (India in particular) and Northern America (namely in the US).
SOYBEAN 2023/24 production lowered further this month on reduced crop prospects in the US following persistent unfavourable growing conditions, more than offsetting higher forecasts for Argentina and Ukraine. Utilization in 2023/24 raised marginally m/m, chiefly reflecting upward revisions for China and Mexico, thus confirming a 6% y/y growth in global consumption.
Trade in 2023/24 (Oct/Sep) downgraded slightly, largely reflecting expectations of smaller shipments from the US that coincide with decreased import forecasts for China.
Stocks (2023/24 carry-out) trimmed on lower forecasts for Brazil and the US, yet global inventories still pointing to a 12% recovery from its opening levels.
Crop conditions around the world (at a glance)
In the northern hemisphere, spring wheat harvesting is wrapping up with poor conditions in Canada, the US, and China. In the southern hemisphere, there are ongoing dry conditions in Argentina and Australia.
In the southern hemisphere, conditions are mostly favourable with exceptional outcomes expected in Brazil for the larger season crop. In the northern hemisphere, conditions remain mixed as harvesting ramps up.
In China, recent rains improved vegetation in the south and southwest. In India, the Kharif harvest begins with concern for below-average monsoon rains in the south. In Southeast Asia, conditions remain favourable except in Thailand.
In the northern hemisphere, harvesting begins under mixed conditions with dry and hot weather in the US, Romania, the Russian Federation, and China.
The GOI wheat sub-Index touched a two-year low in early September and averaged 1% lower month-on-month. However, trends were two-sided as pressure from sustained Black Sea competition contrasted with tightening supply prospects, notably for high protein wheats. Tight Gulf logistics contributed to firmer US quotations, while Australian values drew support from dwindling local production forecasts. EU prices were buoyed by renewed buying by China. Bucking trends at other origins, the Russian Federation's quotations for private business declined, with more talk that the unofficial price floor was only applicable to public tenders.
Following seven consecutive monthly losses, average world maize export quotations strengthened in September; the GOI sub-Index rebounding by 7%.
US quotations worked higher, boosted by tightening nearby Gulf loading capacity and complications caused by low water levels along Midwest rivers.
Values in Brazil increased on solid overseas demand, slow country movement and difficult logistics in southern areas.
Values in Argentina were similarly firm on slow farmer selling interest, competition from domestic consumers and concerns about dry planting weather.
Supported by earlier restrictions on Indian exports, average global rice prices were stronger in September, with the GOI sub-index up by 2% month-on-month.
However, gains were pared by subdued international demand, with some buyers reluctant to conclude purchases at current prices.
Currency movements weighed on dollar-denominated offers in Thailand, while Vietnamese quotes were little changed amid slow activity ahead of tenth-month crop arrivals.
Seasonal pressure was also seen in Pakistan, albeit quotes were supported by an uptick in buying interest amid competitive prices. In India, parboiled quotes were firmer, in the wake of the imposition of a 20% export duty.
Average world soybean prices were 2% weaker monthon-month. US values eased on tepid overseas demand amid stiff late-season competition from Brazil.
Seasonal pressure also featured as local harvesting got underway, albeit as worries about yields offered support. Softer soya product values, most notably soya oil, added to the negative tone.
Quotations in Brazil eased, as seeding of the 2023/24 crop got underway amid early outlooks for another bumper crop.
In Argentina, a renewed preferential exchange rate scheme saw an uplift in farmer selling, albeit as tight supplies continued to underpin prices.
Major market developments
Fertilizer prices were mostly up in September along with prices for main fertilizer inputs. Price movements for several fertilizer categories were influenced by strength in the Indian market and uncertainty around exports from China. Market developments in the near term will be impacted by these two major actors as well as by demand for the fall application season in the Northern Hemisphere.
Fertilizer input prices increased in September.
In the case of natural gas, the previous concerns on liquified natural gas (LNG) exports out of Australia have dissipated but extensions of the maintenance schedule for plants in Norway supported European gas futures. Markets should be focused on monitoring stock levels in Europe, currently near capacity. Following an upward trend that started in August, ammonia prices surged in September, supported by major plant outages, while buyers showed unusually strong interest during this normally rather quiet time of the year.
Nitrogen fertilizer prices increased in September. Urea price increases were driven by uncertainty around the Chinese export levels, as authorities limited the distribution of export licenses to control domestic pricing. In this context, the unexpected purchase tender of Indian Potash Ltd. (IPL) on 15 September also provided support. Developments in China and India will continue shaping market sentiment in other nitrogen markets around the globe.
Phosphorus fertilizer prices increased in several major markets with particular strength in the Indian market and uncertainty around export restrictions from China linked to the customs inspection process. On the other hand, the earthquake in Morocco did not trigger major supply issues as initially anticipated. Current discussions on the nutrient-based subsidy rates in India are a major factor to watch, while demand is slow in Brazil and uncertain in the United States in view of the phosphate to grain price ratio that will determine application rates in the fall.
Potash prices in major importer Brazil were down slightly in September due to abundant availabilities. Global values show signs of stability.