OVERVIEW

Global production for 2015/16 is down from last month with reductions primarily in India, Australia, Madagascar, and the Philippines. Consumption is revised lower but still exceeds production, drawing down stocks. Stocks are forecast at the lowest level in 8 years. Trade is down marginally with reduced exports for India and Australia. U.S. exports are unchanged.

Australia is a producer and important exporter of medium-grain rice. Current limited water availability has cut area to the lowest level since 2009/10, with production forecast at about onethird of the previous 5-year average. Similar to past drought years, the limited crop is expected to constrain exports, this time tumbling to 180,000 tons and well below the 400,000 tons shipped in recent years. Other medium-grain exporters, such as the United States, now have expanded opportunities to ship to Australia's traditional markets in Asia, Oceania, and the Middle East.

Over the past month, Thai quotes were unchanged, while Viet quotes fell marginally due to slow global demand. For the first time in 3 months, U.S. quotes are down noticeably, falling 8 percent or $45/ton to $530/ton also due to slower export demand. U.S. quotes, however, maintain a significant premium of nearly $150/ton over Southeast Asian origins.

Over the past calendar year, Thai dropped 13 percent from $423/ton to $369/ton. Viet quotes fell a marginal 2 percent from $383/ton to $375/ton. After beginning the year at close to $530/ton, U.S. prices fluctuated within a $100 range, but have settled back at $530/ton.

SELECTED TRADE CHANGES for 2016

  • Australia's exports are slashed 150,000 tons to 180,000 due to a significantly smaller crop.
  • Bangladesh's imports are lowered 250,000 tons to 600,000, reflecting reduced exports by India, its major supplier.
  • India's exports are cut 1.0 million tons to 8.5 million on the smallest crop in 5 years.
  • Madagascar's imports are raised 100,000 tons to 350,000 on a smaller crop.
  • Nigeria's imports are reduced 500,000 tons to 2.5 million as the government continues to limit imports.
  • Thailand's exports are boosted 500,000 tons to 10.0 million based on improved competitiveness relative to India.
  • Vietnam's exports are raised 100,000 tons to 7.1 million, reflecting stronger demand in Southeast Asia