OVERVIEW

Global production for 2015/16 is raised from last month, mostly on an upward revision to India's crop. Despite these adjustments, global rice production is the lowest in 4 years. Trade is raised marginally. Global stocks are revised higher this month but are down 13 percent from the prior year. The U.S. season-average farm price is lowered.

Indian Rice Exports Hit Record on Larger Basmati Shipments

In 2015, India became the top rice exporter, setting a record of 11.0 million tons. Basmati (fragrant) exports surged 16 percent to 4.2 million tons while coarse (non-fragrant) exports were lower compared to the prior year. India is the largest basmati exporter, accounting for over 80 percent of global trade, with the remainder mainly from Pakistan. The primary export markets are the European Union and the Middle East. Larger exports to Saudi Arabia, the United Arab Emirates, and Iraq more than compensated for smaller shipments to Iran.

Basmati exports will likely comprise an even larger share of total Indian exports in the coming year as coarse rice will face competition from other Asian suppliers.

Central American Rice Imports Rise, U.S. Regains Market Share

Central America is an important destination for U.S. exports, particularly for rough rice. The region prefers purchasing lower-cost rough rice and milling it locally to obtain the added value in country, supporting the local processing sector. From 2011 to 2012, the United States had an 80 percent market share. In 2013, however, the region's imports of U.S. rice plummeted from 426,000 tons to 270,000. The United States lost significant market share to Brazil and other Latin American countries.

Over the past couple of years, imports of U.S. rough rice have rebounded, recapturing market share in the region. In addition to improvements in quality, U.S. rough rice benefited from the introduction of policy safeguards in the region, including Costa Rica's decision to increase the import tariff on milled rice. Such policies provided an incentive to import rough rice, and helped the United States regain market opportunities in the region.

U.S. Premium Over Competitors Remains

Over the past month, U.S. export quotes remained stagnant at $515/ton, maintaining a substantial premium over both South American and Asian competitors. Vietnamese quotes rose 3 percent to $364/ton on anticipated growing demand from Asian countries. Thai quotes increased slightly to $375/ton during the month. Uruguay quotes continued to slide, as farmers continue to harvest the new crop.

SELECTED TRADE CHANGES for 2016

  • Cambodia's exports are raised 100,000 tons to 900,000 on the pace of trade and continued strong prospects in the region.
  • China's exports are lowered 100,000 tons to 350,000 on a slower pace of exports. Imports are revised up 300,000 tons to 5.0 million.
  • India's exports are raised 100,000 tons to 8.6 million on larger exportable supplies.
  • Indonesia's imports are up 100,000 tons to 2.0 million on a smaller crop.

MULTI-YEAR REVISION

China's imports have been revised from 2013 to present, incorporating data covering trade with Pakistan, Cambodia, and Laos. China's 2013 imports are up 17,000 tons to 3.5 million, 2014 imports are up 282,000 tons to 4.5 million, 2015 imports are up 650,000 tons to 5.2 million.