By IFCMarkets

Rice price is falling despite lower exports from Thailand

United Nation’s Food and Agriculture Organization (FAO) and the Organisation for Economic Cooperation and Development (OECD) forecast a slight decline in agricultural prices in real terms over 2020-2029, according to a report released yesterday. They predict higher productivity, led by yield gains, would keep pace with population-driven food demand and curb global prices. They also warned of “downward pressure on agricultural commodity prices” by “the macroeconomic shocks induced by the COVID-19 pandemic”. At the same time Thailand is facing hurdles in increasing its rice exports due to high exchange rate of its currency – baht, as well as financial problems that major Thai exporters experience after the collapse of Phoenix Commodities, one of the world’s biggest commodity traders. Thailand is the second biggest rice exporter in the world and accounted for 19.2% ($4.2 billion) of global rice exports in 2019. Thailand shipped a total of 2.57 million tons of rice in the first five months, down 31.9% from the same period last year. However technical setup is bearish for rice despite lower exports from Thailand.

Summary of technical analysis

Market Analysis provided by IFCMarkets