OVERVIEW

For 2016/17, global production continues at a record, and is raised this month mainly on a larger Indonesian crop. Trade is revised lower on smaller imports for Indonesia and Saudi Arabia. Exports are lowered for Egypt and Pakistan. Both global consumption and stocks are revised higher, with consumption at a record.

Indonesia Rice Imports Decline on Larger Domestic Production

Indonesia, the world’s third-largest consumer and producer of rice, is forecast to import only 500,000 tons in 2017, a 50-percent reduction from 2016 levels due to an anticipated rebound in production. Indonesian production meets most of its domestic demand, with imports only accounting for shortfalls and to source fragrant varieties. Although imports constitute a small amount of overall supplies, Indonesia’s relative absence in the thinly-traded rice market has significant impacts on its key suppliers. Forecasted 2017 imports are expected at the lowest level since 2009, when the country brought in a meager 250,000 tons.

Thailand and Vietnam are the primary suppliers of rice to Indonesia. In recent years, Vietnam has supplied the majority, but with affordable old crop supplies, Thailand has gained market share. With ample supplies in both countries, there is likely to be stiff competition to fulfill the Indonesian market.

Although not a traditional exporter, Indonesia is now setting ambitious export targets given its sufficient domestic supplies. Despite these efforts to export, Indonesia is expected to remain a net importer.

PRICES

Over the past month, Indian quotes have continued to climb, in part reflecting a stronger rupee. In contrast, Pakistani quotes have dropped from their unusually high January levels but remain somewhat firm at $380/ton. Thai 100B quotes remained relatively steady at $377/ton, with recent strengthening of the baht. Vietnamese quotes remain the lowest and have slid to $349/ton on the ongoing harvest in the Mekong Delta.

SELECTED TRADE CHANGES for 2017

  • Bangladesh imports are raised 100,000 tons to 150,000 on larger purchases from India, despite the import duty that remains in place.
  • Indonesia imports are cut 300,000 tons to 500,000 as a more abundant crop tempers import demand.
  • Saudi Arabia imports are lowered 150,000 tons to 1.4 million on more modest purchases.
  • Egypt exports are slashed 200,000 tons to 100,000 amid the continued export ban.
  • Pakistan exports are trimmed 200,000 tons to 4.0 million on weak sales in light of relatively high export quotes.