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OVERVIEW FOR 2018/19

Global rice production in 2018/19 is forecast at a record, up modestly from the prior year on greater area. The largest year-to-year increase is for Bangladesh, which is expected to recover from recent drought and untimely floods. Both area and yield are expected to return to more normal levels. Likewise, Indonesia is projected to produce more with a slightly higher yield. For Thailand, an increase in double-cropping will lead to more production. The United States is forecast to have larger planted area, particularly for long-grain rice. These gains are partially offset by reductions for the two largest-producing countries. Production in China is forecast lower, as reduced minimum support prices lead to lower planted area. Production in India is forecast down on a return to trend yield. The crop in Egypt is expected to be sharply lower on account of anticipated enforcement of the planted area limitations set by the government.

World consumption is set to increase slightly by 1 percent. The largest increase in consumption is forecast for China, the top consumer, while the biggest decline is for Thailand where old crop rice for feed and industrial use has dwindled as stocks decline. Food use accounts for the bulk of rice consumption. In some regions where rice per capita consumption has traditionally been high, particularly in Asia, people are consuming less rice as their diets diversify. In contrast, in many African countries, rice consumption is rising especially in urban areas. A limited amount of rice is used for feed among rice producing countries, such as Thailand.

Global production continues to exceed consumption, and therefore global 2018/19 ending stocks are projected to continue their upward trend. Ending stocks have increased every year for the past 11 years, though the expected increase in 2018/19 is smaller than in recent years. As in recent years, China is primarily responsible for this growth. Its ending stocks are forecast to rise more than 3 million tons. Domestic policies have simultaneously led to burgeoning government reserves while also encouraging lower-priced imports from neighboring countries. Consequently, China has the largest production, imports, and stocks in the world.

In contrast, India is forecast to reduce its stocks by 10 percent or 2 million tons. Other top exporters are forecast to see marginal changes in ending stocks, but India’s reduction will keep the trend downward for the top six exporters (India, Thailand, Vietnam, Pakistan, Burma, and United States). Collectively, the top six exporters have been decreasing their ending stocks for the last 5 years. In contrast, this year U.S. ending stocks are forecast up sharply by 18 percent on higher production.

For 2019, trade is forecast up 1.2 percent to a record of nearly 50 million tons. The largest import demand growth is forecast in SubSaharan Africa, and the Middle East, whereas imports for both South and Southeast Asia are expected to decline. India will remain the top exporter, though its year-to-year decline is more than offset by projected gains for Thailand and China. In the Western Hemisphere, U.S. exports are projected to rise, along with Paraguay, whereas Argentina is forecast flat and both Brazil and Uruguay are expected to decline.

Selected Importers for 2019

• China is forecast to continue to import 5.5 million tons. Despite a smaller crop, total supplies are expected to be up from the prior year, due to larger beginning stocks in the government’s temporary reserve. The sales from government auctions are assumed to continue, which will supply lower-priced multi-year-old crop onto the market. Nonetheless, private sector imports from neighboring countries and government-togovernment purchases are expected to continue.

• Nigeria is projected to rise 400,000 tons to 3.0 million as demand for imported parboiled rice remains strong. Domestic production is forecast to remain unchanged despite government efforts to see it expand. Meanwhile, consumption will rise as the population grows, urbanization expands, and the economy stabilizes. Although the government has restricted the use of foreign exchange for rice imports, transshipment through nearby countries will likely remain robust.

• European Union is forecast up 100,000 tons to 2.0 million on moderate growth. India is the largest supplier to the European Union, but other countries, such as Cambodia, Guyana, and Burma, continue to gain market share through the Everything but Arms initiative. The lowering of the maximum residue level for tricyclozole has decreased India’s market share, while Pakistan’s share has expanded.

• Cote d’Ivoire is projected up 150,000 tons to 1.7 million as consumption rises. Despite increases in domestic production, import demand continues to grow for Asian milled and broken rice. The country has a relatively high per capita consumption.

• Iran is forecast up 100,000 tons to 1.4 million on growing demand amid slightly lower domestic production. The country has been seeking higher levels of self-sufficiency, but basmati imports are still desired by consumers.

• Saudi Arabia is forecast up 50,000 tons to 1.3 million on expected expansion in tourist visits offsetting slight declines in the foreign worker population. Imports are primarily basmati rice, but also other fragrant rice, parboiled long grain, and milled medium grain.

• Senegal is projected up 100,000 tons to 1.3 million, reflecting continued demand for broken rice shipments, primarily from Asia. Senegal is the largest importer of broken rice.

• Indonesia is forecast down 600,000 tons to 1.2 million as larger domestic production and stocks dampen the need for imports. Consumption is up only marginally, as consumers continue to shift to consuming more instant noodles and other wheat-based products.

• Iraq is expected to increase 50,000 tons to 1.2 million on a smaller crop. The Ministry of Trade continues to import rice for the Public Distribution System through public tenders and direct purchases. Notably, the private sector supplements the consumer-subsidized goods with additional imports.

• Philippines is down 300,000 tons to 1.1 million on more abundant domestic supplies. This forecast is subject to change, particularly in light of ongoing government decisions related to Quantitative Restrictions on imports.

• Bangladesh is forecast down 700,000 tons to 1.1 million on an expected return to normal production levels. Area and yield are anticipated to rebound following the weather-inflicted losses of the prior year.

• South Africa is flat at 1.0 million tons, as the preferred staple of white maize remains readily available.

• Malaysia is forecast up 100,000 tons to 1.0 million to rebuild dwindling stocks.

• The United Arab Emirates is projected to rise 75,000 tons to 900,000 as the population and tourism industry expand.

• Mexico is forecast up 20,000 tons to 880,000 due to higher domestic consumption and continued exports to Venezuela.

• United States is forecast to remain at 825,000, primarily fragrant varieties.

• Guinea is projected up 25,000 tons to 800,000 as demand for Indian rice expands.

• Kenya is up 50,000 tons to 750,000 on account of growing population and dietary shifts toward rice.

• Mozambique is forecast up 25,000 tons to 750,000 on strong consumption growth.

• Japan remains stable at 685,000 tons to fulfill its WTO minimum import commitments.

• Brazil is forecast up 50,000 tons to 700,000 on a smaller crop and steady demand.

• Cuba is forecast up 10,000 tons to 550,000 on expected consumption growth.

• Haiti is forecast up 20,000 tons to 560,000 due to flat production and slight consumption growth.

• South Korea is steady at 410,000 tons to fulfill WTO minimum import commitments.

• Sri Lanka is projected flat at 400,000 to maintain an adequate level of stocks.

• Venezuela is forecast down 90,000 tons to 300,000 on limited purchases due to financial challenges.

• Canada is forecast up 10,000 tons to 380,000 on increasing consumption trends.

• Turkey is projected to remain at 350,000 tons as consumption grows moderately. Though it typically imports medium grain paddy, it has recently shifted to importing more milled rice.

• Madagascar is forecast down 200,000 tons to 300,000 as the crop is forecast larger. Consumption is expected up modestly.

• Peru is forecast down 30,000 tons to 300,000 on steady production and new import policies. Peru recently raised its import price band to be more in line with prices for locally produced rice.

• Jordan is projected up 10,000 tons to 230,000 on moderate growth in consumption.

• Russia is expected to stay at 260,000 tons with stable consumption.

• Tanzania is projected down 30,000 tons to 230,000 as growing consumption is largely met by a much larger crop.

• Egypt is expected up 150,000 tons to 200,000 on the expectation that imported rice will partly offset the reduced available supply amid a significantly smaller crop. Exports are at negligible levels.

• Taiwan is forecast at 120,000 tons, reflecting WTO minimum import commitments.

• Colombia is forecast up 40,000 tons to 150,000, which will likely primarily be met by filling the tariff rate quota under the Colombia-U.S. Free Trade Agreement.

Selected Exporters for 2019

• India is forecast down 200,000 tons to 13.0 million. The crop is expected to be smaller, while consumption is rising. Notably, import demand from neighboring Bangladesh is projected lower. Typically, it receives a majority of its imports from India. Stocks are forecast to tighten somewhat, but still remain well above desired buffer stock levels. With ample stocks, exports are not expected to be restricted in any way by the government. India is anticipated to be the top exporter for the eighth consecutive year.

• Thailand is forecast up 500,000 tons at 11.0 million due to slightly larger production and continued strong demand. Regional demand will remain strong even though Thailand has nearly depleted all of its government-held stocks. The private sector is expected to compensate by holding more pipeline stocks.

• Vietnam is forecast unchanged at 6.8 million tons on a larger crop and ample supplies. Though trade with neighboring China is still anticipated to be robust, this exporter is increasingly seeking diversified markets in Asia, the Middle East, and Africa. Additionally, it is steadily increasing its fragrant and glutinous exports.

• Pakistan is projected to remain at 4.0 million tons due to slightly lower production and continued competition from other major rice exporters in the region. Pakistan exports primarily to neighboring countries, the Middle East, and Africa. China is also a large recipient of Pakistani rice.

• Burma is forecast steady at 3.5 million tons with relatively low stocks constraining larger exportable supplies. Burma supplies neighboring markets, but also the European Union and Africa. While Burma was once the top rice exporter, it lost this position in the 1960s. Over the past couple of years, Burma’s shipments have surged, and it is projected to be the fifth-largest exporter.

• United States is forecast up 150,000 tons to 3.3 million as more ample domestic supplies enable the country to regain market share. The United States primarily ships rough and milled rice to the Western Hemisphere, while also reaching medium-grain East Asian and medium- and long-grain Middle Eastern markets. Exports represent roughly half of production.

• China is up 200,000 tons to 1.8 million as old-crop rice shipments are expected to continue. Over the past couple of years, low-priced exports have dramatically increased, expanding beyond the neighboring East Asia region to supply Africa and the Middle East. These would be its largest exports since 2003.

• Cambodia is projected up 50,000 tons to 1.3 million on a larger crop and continued demand from neighboring countries and the EU. Cambodia can access the EU market duty-free under the Everything but Arms initiative. Exports to neighboring countries are mostly in the form of paddy rice. The country has been expanding its exports, notably in fragrant varieties and parboiled. (Note: the milling rate has been revised to reflect current milling conditions.)

• Uruguay is forecast down 60,000 tons to 800,000 on lower production levels and beginning stocks from the previous year. Large rice supplies in the region have kept rice prices down, causing some farmers to exit the sector. Although total exports are down, exports to Mexico and Cuba have been growing the last few years.

• Brazil is projected down 50,000 tons to 700,000 due to a slightly smaller crop and increased competition from neighboring exporters. Total rice area in Brazil has declined for 8 of the last 10 years. Farmers are replacing rice with more profitable crops such as corn and soybeans as rice prices have been kept down in the region due to excess supplies.

• Paraguay is forecast up 100,000 tons to 650,000 on a large crop and increased focus on new export markets. Roughly 80 percent of Paraguay’s rice exports are destined to Brazil, but Paraguay is actively pursuing new markets.

• Guyana is forecast up 10,000 tons to 470,000 on larger production and continued exports to newer markets such as Mexico.

• Argentina is forecast to remain at 400,000 tons due to strong regional competition. Argentina has a high cost of production making it less competitive in the international market.

• Australia is projected flat at 300,000 tons as another large crop provides sufficient exportable supplies. The country is a significant medium-grain exporter.

OVERVIEW FOR 2017/18

Global rice production rose again to a new record this month, with higher production in South and Southeast Asia as well as Sub-Saharan Africa. Imports are also at a record level, led by higher purchases by Indonesia, which in turn leads to larger exports from Vietnam. Global stocks are down marginally this month with the largest reductions in Southeast Asia and Sub-Saharan Africa.

RICE PRICES

U.S. FOB export quotes for long-grain milled rice (bagged) rose this month to the highest level in 4 years at $620/ton. South American quotes remained constant since last month with the onset of harvest. Uruguayan quotes remain at $522/ton. Thai quotes rose this month to $446/ton. Interestingly, two origins that tend to have lower quotes, Vietnam and Pakistan, saw their quotes rise higher than Thai quotes this month to $462/ton and $455/ton, respectively. Consistent demand from Indonesia and the Philippines has continued pushing Vietnamese and Pakistani quotes higher. Meanwhile, Indian quotes remained flat rising marginally to $415/ton.

IGC GRAINS CONFERENCE 2018

AGRICRUISE18