Rice. World Markets and Trade. September 2015 – USDA Sept. 12, 2015
Global Rice Consumption Outpaces Production
Global rice production is expected to fall for the first time since 2009/10 due to flooding, drought, and extreme heat in several major producing countries. Combined carrying stocks held by top exporters - India, Pakistan, Thailand, the United States, and Vietnam--are the smallest in 4 years, contributing to reduced global supplies. In contrast, consumption continues to expand in line with population growth.
These market fundamentals would normally signal strong prices. However, prices in major exporting countries continue to decline, influenced by financial developments and policies. The Thai Baht has depreciated nearly 10 percent against the dollar since January. Thai 100B is now priced around $370 per ton compared to $450 a year ago. Vietnam has repeatedly lowered the minimum export price in an effort to stimulate import demand. Furthermore, large importing countries, particularly Indonesia and the Philippines, pursue self-sufficiency policies, which limit import demand. This month's reductions in production forecast for Indonesia and the Philippines have only had a small impact on trade.
Global production for 2015/16 is down 2.9 million tons from last month with smaller crops in Burma, China, Egypt, Indonesia, the Philippines and the United States. Global trade is lowered as reductions in Burma and the United States more than offset stronger exports by India. Global consumption and stocks are down slightly.
Export quotes in Thailand, Pakistan and Vietnam continue to fall as import demand remains weak. During the last month, Thai 100B slipped $16/ton to $370/ton; Pakistan 5 percent brokens dropped $50/ton to $330/ton, the lowest since 2011; and Vietnam 5 percent brokens fell $21/ton to $327/ton, the lowest since 2008. A number of factors, including depreciation of Thai and Vietnamese currencies, contributed to tumbling quotes.
Quotes for U.S. long-grain rice have climbed sharply from last month, rising $60/ton to $565/ton on expectation of a smaller crop. Consequently, U.S. long-grain rice has become less competitive as the gap between Thai 100B and U.S. long-grain quotes has widened to nearly $200/ton, the largest since April 2014.
SELECTED TRADE CHANGES for 2015
- India's exports are up 500,000 tons to 11.5 million reflecting strong shipments to the Middle East and neighboring countries.
- Vietnam's exports are down 500,000 tons to 6.2 million on trade to date.
SELECTED TRADE CHANGES for 2016
- Burma's exports are cut 400,000 tons to 1.8 million on reduced supplies.
- India's exports are raised 500,000 tons to 9.5 million to offset reduced shipments from Burma.
- Indonesia's imports are boosted 200,000 tons to 1.3 million on a smaller crop.
- U.S. exports are down 200,000 tons to 3.3 million on reduced exportable supplies and higher projected long-grain prices.