OVERVIEW

For 2016/17, global production is lowered, primarily on revisions to the China crop, but remains a record. Trade is revised marginally lower, although up from the prior year. Consumption is adjusted slightly lower, but is still up 2 percent from the prior year. Global stocks are revised down with cuts to China, though remain the highest in 15 years.

FEATURE

Over the past 18 months, the USDA forecasts for 2016 exports have evolved, reflecting changing market conditions. Overall, global trade is lower than initially anticipated, reflecting weaker demand from importers. Contrary to initial expectations, Indian consumption has declined, stocks have grown, and the country has remained the top exporter. In contrast, Thai exports ultimately declined from initial expectations, as stock sales were sluggish despite the government's stated commitments to liquidate stocks via auctions. Vietnam, generally a residual supplier, has found it difficult to compete against the Thai old crop sales.

Looking ahead to 2017, trade is forecast higher with higher demand from Asia and the Middle East. India's exports are expected to remain in the lead, though declining marginally as domestic consumption rebounds and non-basmati exports face tighter competition. Thailand's exports are forecast slightly higher, as sales from stocks will continue next year and larger production supplements supplies. Vietnam's exports are forecast up, but still below historical levels.

Imports for several countries have trended down in 2016. China remains the largest importer, though its buying has slowed in recent months. Its imports are forecast to rebound in 2017 with a smaller crop and a renewed commitment to purchase from Thailand. For the Philippines, imports were halved in 2016, despite initial expectations that poor weather conditions would lead to large purchases. Imports are forecast to return to normal levels to replenish stocks. For Bangladesh, however, sufficient production and the imposition of a higher import tariff cut imports dramatically in 2016, which are expected to remain low in the near future. Other key countries such as Nigeria, Indonesia, and Iran also trimmed imports modestly in 2016.

PRICES

Exporter quotes for long-grain rice remained fairly stable over the past month. Only Thailand and India saw quotes strengthen to $379/MT and $353/MT, respectively. The Vietnam quote declined slightly to $343/MT. The Western Hemisphere quotes remain elevated at $465/MT for Uruguay and a slight decline to $455/MT for the United States on thin offshore demand.

SELECTED TRADE CHANGES for 2017

  • Burma exports are lowered 100,000 tons to 1.4 million on slow border trade.
  • Cote d'Ivoire imports are raised 150,000 tons to 1.4 million on expectations of continued consumption growth.
  • Guinea imports are boosted 100,000 tons to 500,000 on rising demand for imported rice amid shifting diets.

SELECTED TRADE CHANGES for 2016 – based on trade data

  • Burma exports are lowered 100,000 tons to 1.1 million.
  • China imports are cut 100,000 tons to 4.5 million.
  • India exports are down 300,000 tons to 10.2 million.