Global rice shortage is expected
The British company Economist Intelligence Unit (EIU) has published another review of the global rice market. Will Rice price continue to rise?
According to forecasts of the EIU, the global rice consumption in the 2018/19 agricultural season will increase by 1.4% to a record level of 500 million tons. In the next 2019/20 season, it will increase by another 1% to 505 million tons. At the same time, the world rice production in 2018/19 season will be only 493 million tons and in 2019/20, it will increase only to 499 million tons. Thus, until 2020, there will be a shortage of rice in the world, which should be covered from world reserves. A winter rice sowing reduction is expected in India because of drought in the current 2018/19 season to 0.733 million hectares from 1.051 million hectares in the 2017/18 season. Another factor, which may contribute to the increase in rice prices is its purchase by Iran from India in exchange for Iranian oil. Let us note that the Philippine state agency National Economic and Development Authority (NEDA) is going to reduce import tariffs with the aim of compensating the possible increase in rice prices. Recently, the Philippines purchased 203 thousand tons of rice from Thailand and Vietnam.
On the daily timeframe, Rice: D1 is rising within the growing channel. A number of technical analysis indicators formed buy signals. The further price increase is possible in case of the deterioration of weather conditions and a reduction in world harvest in the current season.
Summary of technical analysis
Position Buy
Buy stop Above 11.2
Stop loss Below 10.3
The British company Economist Intelligence Unit (EIU) has published another review of the global rice market. Will Rice price continue to rise?
According to forecasts of the EIU, the global rice consumption in the 2018/19 agricultural season will increase by 1.4% to a record level of 500 million tons. In the next 2019/20 season, it will increase by another 1% to 505 million tons. At the same time, the world rice production in 2018/19 season will be only 493 million tons and in 2019/20, it will increase only to 499 million tons. Thus, until 2020, there will be a shortage of rice in the world, which should be covered from world reserves. A winter rice sowing reduction is expected in India because of drought in the current 2018/19 season to 0.733 million hectares from 1.051 million hectares in the 2017/18 season. Another factor, which may contribute to the increase in rice prices is its purchase by Iran from India in exchange for Iranian oil. Let us note that the Philippine state agency National Economic and Development Authority (NEDA) is going to reduce import tariffs with the aim of compensating the possible increase in rice prices. Recently, the Philippines purchased 203 thousand tons of rice from Thailand and Vietnam.
On the daily timeframe, Rice: D1 is rising within the growing channel. A number of technical analysis indicators formed buy signals. The further price increase is possible in case of the deterioration of weather conditions and a reduction in world harvest in the current season.
- The Parabolic indicator gives a bullish signal.
- The Bollinger bands have narrowed strongly, which indicates low volatility. Both bands are titled upwards.
- The RSI indicator is above 50. No divergence.
- The MACD indicator gives a bullish signal.
Summary of technical analysis
Position Buy
Buy stop Above 11.2
Stop loss Below 10.3