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HIGHLIGHTS OF 2017/18

Global production is projected to decline fractionally to 481.3 million tons. The U.S. crop is forecast down 10 percent to 6.4 million tons on reduced long-grain area. In Egypt, area and production are down because of restrictions on water use. India’s crop is forecast slightly lower, whereas Sri Lanka’s crop is forecast to rebound from a drought-stricken 9-year low to a record crop. Production in Thailand is also expected higher on main-crop recovery with ample water supplies.

Global consumption continues to rise, though the growth is modest. Food use is growing with the largest increase in India, based on a growing population. Feed and industrial use is expected to increase in Thailand, as the remainder of government stocks are anticipated to be used. Rice feed use is forecast down in China.

Within certain countries in Southeast and South Asia, diets are shifting away from rice and towards wheat. Therefore, despite growing populations, total rice consumption in Bangladesh is flat and in Indonesia is declining as a higher proportion of food grain consumption is derived from wheat.

Generally, Sub-Saharan Africa (SSA) has seen rapidly rising consumption rates due to population growth, and the shifting of diets from traditional roots and tubers to rice. Now a staple food in many African countries, rice consumption growth has outpaced production capabilities, spurring imports. SSA rice imports have more than doubled since 2001, and are forecast to reach 12.9 million tons in 2018. Notably, Cote d’Ivoire is forecast to become the fifth-largest global rice importer in 2018 with 1.5 million tons. Although production within Cote d’Ivoire has expanded in recent years, consumption growth has outpaced supplies, and the country relies on Thai, Indian, and Vietnamese broken and milled imports to meet demand. West and Southern Africa typically source from these same Asian suppliers, while East Africa imports mainly rice from Pakistan.

Nigeria is Africa’s most populous country, and the second-largest importer of rice in the world, following China. However, governmental self-sufficiency efforts and restrictive import policies have contributed to a decline in imports from 3.4 million in 2012 to a forecast of 2.1 million in 2018. Since domestic supplies are limited and prices of locally-produced and imported rice have increased, rice consumption in Nigeria has actually declined in the past couple of years. Despite overall declines in import demand in Nigeria, import growth throughout the rest of the region remains robust, creating potential growth markets for global rice exporters.

As global supplies are expected to exceed use, global 2017/18 ending stocks are projected to rise marginally. Notably, this growth in stocks is almost entirely attributable to China, where stocks are forecast to rise 9 percent to over 75 million tons. These are the largest since 2001/02 and represents over 60 percent of global stocks. Government policies are encouraging production that surpasses domestic needs. This is compounded by the fact that high government support prices relative to prices in neighboring countries incentivize imports. China has the largest production, imports, and stocks in the world.

In contrast, ending stocks for the top five exporters are forecast to continue their decline. Stocks in Thailand are forecast down 28 percent to 4.5 million tons, as the government seeks to fully auction off long-held stocks, and the private sector is expected to hold a typical amount of stocks. Meanwhile India’s stocks are forecast at 17.4 million, down 8 percent from the prior year, but still well above desired buffer stock levels. The stocks for these two top exporters are forecast to be the lowest since 2007/08. Amid lower production and steady export expectations, U.S. ending stocks are also forecast down 21 percent to 1.2 million tons, the lowest since 2013/14.

Global trade for 2018 is forecast to rise to 42.2 million tons, up 2 percent from 2017 and the third highest on record. Import demand from China, the EU, Africa, and the Philippines remains robust. The majority of rice is still consumed within the country where it is produced, with less than 10 percent of rice production traded on the global market.

Selected Importers for 2018

  • China is forecast down 200,000 tons to 4.8 million, on a slightly larger crop. China remains the largest importer as prices in neighboring countries are expected to remain relatively lower than the minimum support prices, spurring border trade.
  • Nigeria is projected steady at 2.1 million tons as demand for imported parboiled rice remains strong, but restrictions on the use of foreign exchange and high tariffs constrain the volume. Overall, consumption has been trending down as rice has become more expensive relative to alternative grains and tubers.
  • The EU is forecast up 50,000 tons to 1.9 million on moderate growth. The planned reduction in minimum residue levels for tricyclozole is expected to prove challenging for some trading partners.
  • The Philippines is up 400,000 tons to 1.8 million on strong demand for lower-priced imports following the anticipated expiration of the Quantitative Restrictions.
  • Cote d’Ivoire is projected up 150,000 tons to 1.5 million as demand continues to grow for both milled and broken rice imports.
  • Saudi Arabia is expected up 50,000 tons to 1.5 million on continued population growth. Imports are primarily basmati rice, but also other fragrant rice, parboiled long grain, and milled medium grain.
  • Iran is forecast up 50,000 tons to 1.1 million on growing demand amid relatively stable domestic production.
  • Iraq is expected to increase 50,000 tons to 1.1 million as accelerating private-sector purchases offset meager buying by the government for the Public Distribution System.
  • Senegal is projected up 50,000 tons to 1.1 million, reflecting continued demand for broken rice shipments. Senegal is the largest importer of broken rice.
  • South Africa is forecast up 25,000 tons to 950,000, reflecting population growth.
  • Malaysia is steady at 900,000 tons as consumption demand remains relatively consistent.
  • The United Arab Emirates is projected to increase 75,000 tons to 825,000 as the population and tourism industry expand.
  • The United States is forecast to remain at 750,000 tons, primarily fragrant varieties.
  • Guinea is projected up 50,000 tons to 700,000 as demand for Indian rice expands.
  • Mexico is forecast steady at 800,000 due to increased domestic production.
  • Japan remains stable at 685,000 tons, fulfilling its WTO minimum import commitments.
  • Brazil is forecast to remain at 600,000 tons on a smaller crop and steady demand.
  • Cuba is forecast up 70,000 tons to 580,000 due to a smaller crop and steady demand.
  • Kenya is up 20,000 tons to 520,000 on account of growing population and a preference for basmati rice.
  • Haiti is forecast up 10,000 tons to 500,000 on expected consumption growth.
  • Indonesia is forecast to remain at 500,000 tons as domestic production is up and consumption remains relatively flat.
  • South Korea is steady at 410,000 tons to fulfill WTO minimum import commitments.
  • Venezuela is forecast up 20,000 tons to 400,000 on expected continued commercial purchases despite financial challenges.
  • Canada is forecast up 5,000 tons to 370,000 on consumption trends.
  • Turkey is projected up 20,000 tons to 320,000 as consumption grows moderately. Turkey continues to import primarily paddy and exports milled rice to nearby countries.
  • Bangladesh is forecast up 150,000 tons to 300,000 on demand for affordable rice from neighboring countries.
  • Madagascar is expected up 100,000 tons to 300,000 on a smaller crop.
  • Peru is forecast to remain at 300,000 tons on steady production.
  • Jordan is stable at 210,000 tons on steady demand.
  • Russia is expected to stay at 200,000 tons with stable consumption.
  • Tanzania is projected to stay at 200,000 tons, mostly importing from Pakistan and India.
  • Taiwan is forecast at 126,000 tons, reflecting WTO minimum import commitments.
  • Colombia is forecast to remain at 110,000 tons on increased production and intentions to not import over the U.S. TRQ existing under the Colombia-U.S. FTA.
  • Sri Lanka is projected down 150,000 tons to 50,000 on a significantly larger crop.

Selected Exporters for 2018

  • India is forecast steady at 10.0 million tons. Despite a smaller crop and strong domestic demand, basmati and nonbasmati exports are expected to remain competitive.
  • Thailand is forecast to remain at 10.0 million tons. Though production is larger, the carry-in stocks are expected to be lower, limiting the quantity of low-cost rice available for export.
  • Vietnam is up 400,000 tons to 6.0 million on increased demand from Southeast Asia, especially the Philippines. Border trade to China is still expected to account for the majority of exports.
  • Pakistan is projected up 100,000 tons to 4.1 million on a larger crop.
  • United States is forecast down 50,000 tons to 3.5 million on a much smaller crop.
  • Burma is forecast up 100,000 tons to 1.7 million on higher demand from regional markets and the EU.
  • Cambodia is projected up 50,000 tons to 1.3 million on a larger crop and continued demand from neighboring countries and the EU.
  • Uruguay is forecast to remain at 900,000 tons on similar production levels from the previous year.
  • Brazil is projected down 100,000 tons to 700,000 due to a smaller crop.
  • China is up 300,000 tons to 800,000 on expected growth of old-crop rice shipments to West Africa.
  • Paraguay is forecast up 30,000 tons to 500,000 on a large crop.
  • Argentina is forecast down 100,000 tons to 450,000 from the prior year due to a smaller crop and carry-in supplies and strong regional competition.
  • Australia is projected up 75,000 tons to 325,000 as another large crop provides sufficient exportable supplies.
  • Egypt is forecast up 100,000 tons to 200,000 as ample carry-in stocks are expected to once again make exporting to the region a possibility again.

OVERVIEW OF 2016/17

Global production is up marginally from the prior month, with increases in Cambodia, Egypt, and Chad more than offsetting a reduction in Cote d’Ivoire. Global consumption is adjusted down, though still up from the prior year. Ending stocks are revised higher, with increases for India and China more than offsetting a reduction for Thailand. Global trade is down fractionally.

U.S. Rough Rice Exports Growing

Rough rice is becoming an increasingly important part of total U.S. rice exports, driven by robust demand from the Western Hemisphere and the Middle East. On a product-weight basis, rough rice rose to account for over 45 percent of U.S. rice exports in 2016, a trend that has continued into the first quarter of 2017. Exports in the first quarter of 2017 were strong to core Western Hemisphere markets as well as the Middle East. Mexico remained the top market during this period, despite the recent tariff rate quota announced by the Mexican government. Despite economic turmoil, demand in Venezuela has remained strong, with U.S. exports to the country tripling year to date. Shipments to Central America have also grown so far this year. Exports have risen to Libya and Turkey, which have been intermittent medium-grain buyers. Despite some rough rice export competition from South American suppliers, particularly Brazil, Paraguay, and Uruguay, the United States remains the world’s largest rough rice supplier.

PRICES

Under recent harvest pressure and weak off-shore demand, Vietnamese exporter quotes have been trending lower. Meanwhile, other Asian suppliers have seen strengthening. Robust demand from Nigeria and Iran has lifted quotes for both Thailand and India. Pakistani quotes are even higher as the country steadily supplies markets in advance of Ramadan. These developments have narrowed the gap between quotes for most Asian exporters and the Western Hemisphere suppliers.

Monthly Trade Changes for 2017

  • Nigeria’s imports are raised 200,000 tons to 2.1 million on recent large parboiled shipments from Thailand and India.
  • Burma’s exports are raised 100,000 tons to 1.6 million on strong exports in the first quarter.
  • Cambodia’s exports are up 200,000 tons to 1.2 million, based on robust regional trade and exports to the EU.
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