OVERVIEW

For 2016/17, global production is still projected at a record. Global trade and consumption are little changed. The U.S. season-average farm price is forecast slightly higher than last month, though still below the previous year's level.

For 2015/16, global production is higher as an upward revision to the Indian crop more than offsets declines in Argentina and Uruguay. Stocks are up from last month, but trade is down slightly. U.S. exports are raised marginally on the pace of shipments.

Vietnam's Jasmine Rice Exports Continue to Rise

Vietnamese exports of fragrant Jasmine rice continue to rise rapidly, up 350 percent from 2009. This comprises a growing proportion – now over 20 percent – of the country's total exports. Initial growth in Jasmine exports was on account of Asian markets, such as China and Hong Kong, where Jasmine rice has long been consumed. So far in 2016, a majority of Vietnam's Jasmine shipments have been to Africa, a relatively new market.

Within Africa, Ghana is the primary market. In the first four months of 2016, Vietnam exported over 135,000 tons of Jasmine rice to the country, a 60 percent increase compared to the same period last year. Changing tastes and preferences have fueled import demand for Jasmine rice, which is not locally produced.

Libya Becomes Top U.S. Medium-Grain Rough Rice Market

The core U.S. markets for medium-grain rough rice have been Turkey, Mexico, and Libya. Mexico, with its close proximity, has been a steady market. Until recently, Turkey has been a significant buyer, importing rough rice to mill and re-export to neighboring markets. However, thus far in 2016, it has yet to purchase any U.S. rice, relying more on nearby suppliers for medium-grain and increasingly purchasing long-grain. Notably, recent sales to Libya have finally brought improved export prospects for the abundant medium-grain supplies in the southern U.S. region. Exports to Libya to date have surged to nearly 50,000 tons (rough basis), making it the largest market so far in 2016.

PRICES

Over the past couple of months, Asian export quotes have strengthened, with the exception of Vietnam where weaker demand from Southeast Asian markets has caused quotes to fall to $369/ton. Indian export quotes are marginally higher at $380/ton. Pakistani quotes, typically at a discount to India, have seen a sharp run-up to $410/ton, suggesting tightness in the market. Likewise, export quotes from Thailand escalated to $416/ton, in part due to production-related concerns and declining stocks, but have recently leveled off.

Selected Trade Changes

  • Philippines imports are cut 300,000 tons to 1.5 million for 2016 due to slower trade and adequate supplies.
  • Burma exports are reduced 150,000 tons to 1.7 million for 2016 on slower trade to date and trimmed 100,000 tons to 1.8 million for 2017 on expectations of continued constraints to border trade.