PRODUCTION

Production for 2015/16 is forecast at 1.5 tons (rough production), higher than last year's crop. Harvested area could increase marginally at 235,000 hectares, but average yields are forecast to be higher (yields in crop 2014/15 were lower than average). Rice area in Corrientes province could increase somewhat as there are no production alternatives and water ponds have good levels of water. Rice area in Entre Rios could remain relatively similar as it is produced with diesel and electrical pumps. Despite lower world oil prices, fuel prices in Argentina have not declined, making this type of production unprofitable. Those using electricity are expected to come breakeven in marketing year 2014/15. Contacts have indicated that current domestic prices will have to decline somewhat to meet what exporters can pay, and, if not, exports will be minimal. Higher yields and better quality than earlier estimated is occurring with the 2014/15 crop. More than 50 percent of the harvest is already finished. Approximately 10,000 hectares were lost earlier in the season due to flooding and river overflows.

CONSUMPTION

Argentine rice consumption for 2015/16 is forecast at 410,000 tons (milled basis). Rice demand is expected to remain stagnant as most local economists predict a slow growing economy.

TRADE

Exports for 2015/16 are forecast up at 580,000 tons as a result of a projected larger output. Argentina is expecting to continue to export large volumes of milled rice to Iraq (under official bids). Exports to Brazil are uncertain as Argentina has lately been more expensive than Paraguayan rice. Export of milled rice to Bolivia is expected to continue strong. This market imports officially some 30-40,000 tons of milled rice and local rice may experience border leakages in a similar volume. Chile is also a significant market, but lately Paraguayan rice has been very price competitive, making purchases of Argentine rice drop.

STOCKS

Ending stocks for 2015/16 are forecast at 236,000 tons, similar to the previous year.

POLICY

The current policies that mostly affect grain production and trade are export tariffs and export quotas for wheat and corn. The export quota system known as the Registry of Export Operation, or ROE, was created in 2007 with the original objective of delinking high international prices from local food prices. The ROE system is currently applied primarily on wheat, corn and beef exports. By limiting exports and announcing export quotas without a given pattern, buyers for the domestic market and exporters do not compete for the product, making farmer prices artificially low. Export taxes provide price advantages for local processing industries and animal feed sector. Current export taxes are 23 percent for wheat, 20 percent for corn, 20 percent for barley and 5-10 percent for rice. These policies have reduced both corn and wheat production over the years in favor of soybean production, which is not affected by export quotas. The leading presidential candidates have all indicated that the agricultural sector needs to be reformed and have stated that they would eliminate the ROE and reduce or eliminate export taxes on grains, save for soybeans, upon taking office on December 2015.

Rice, Milled

2013/2014

2014/2015

2015/2016

Market Begin Year

Apr 2013

Apr 2014

Apr 2015

Argentina

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Harvested

241

241

239

222

0

235

Beginning Stocks

227

227

224

224

0

246

Milled Production

1,027

1,027

975

877

0

975

Rough Production

1,580

1,580

1,500

1,349

0

1,500

Milling Rate (.9999)

6,500

6,500

6,500

6,500

0

6,500

MY Imports

5

5

5

5

0

5

TY Imports

6

6

5

5

0

5

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

1,259

1,259

1,204

1,106

0

1,226

MY Exports

600

600

580

450

0

560

TY Exports

494

494

580

450

0

560

Consumption and Residual

435

435

440

410

0

410

Ending Stocks

224

224

184

246

0

256

Total Distribution

1,259

1,259

1,204

1,106

0

1,226

1000 HA, 1000 MT, MT/HA