For 2017/18, global production is raised this month to the second highest on record as larger crops in Nigeria and Egypt more than offset reductions in Bangladesh and Brazil. Consumption is lowered as multi-year downward revisions for China exceed upward revisions for Nigeria. With lower consumption, global stocks are raised to the highest level since 2000/01. Global trade is nearly unchanged this month, as larger imports by Bangladesh and Nigeria nearly offset reductions for the Philippines and Ghana.


Export quotes for the top Asian suppliers remained relatively flat over the past month, down from the pre-harvest peaks. The narrow spread between Asian exporters reflects strong competition for the ongoing Bangladeshi tenders. Thai and Indian quotes have converged around $405/ton, while Vietnamese quotes are at $390/ton and Pakistani quotes are slightly below these at $385/ton. Meanwhile, the U.S. quote has risen to $560/ton, largely on the smaller U.S. crop.

China's Rice Stocks Continue Rapid Growth as Consumption Remains Steady

Estimates for Chinese rice consumption and stocks have been revised this month (from 2010/11 to present) to more closely reflect current dynamics in the market. China’s government does not publish estimates of rice stocks. Therefore, estimates of consumption and stocks are based on assumptions regarding the trends in the market, supported by facts regarding government procurement and auctions of the state reserves.

USDA estimates of consumption include all uses for rice. In the case of China, this primarily includes food use, but also feed, industrial, seed, waste, and loss. Chinese depend not only on rice but also on wheat and to a lesser extent on corn for their grain intake. In addition, with rising incomes, animal protein consumption has been rising. Rice is a relatively expensive feedstuff and has become more so in the context of more abundant corn in recent years. Seed use has remained relatively stable.

In total, rice consumption is currently estimated as stable around 103 kg per person over the past 5 years, revised down from 104-106 kg/person in last month’s data. This compares to 74 kg/person for wheat food, seed, and industrial (FSI) use. Chinese rice per capita consumption remains above other East Asian countries such as Japan (67 kg), South Korea (94 kg), and Taiwan (48 kg).

Current Chinese government policy has been to encourage the production of rice by maintaining relatively high procurement prices. Though the procurement price has declined slightly this year, selling to government reserves remains an attractive option for producers. The policy has led to a rapid accumulation of stocks. Government purchases for the state reserve have averaged over 30 million tons of paddy per year since 2013. The 2017/18 procurement is ongoing, so the total acquired this year for state reserves is not yet known.

The procurement by the government has only been partially offset by the release of the acquired stocks. Auctions of those reserves have been ongoing, but typically only a small percentage of what has been offered has been sold. In multiple auctions during 2016, half a million tons were offered at auction but nothing was sold.

However, the dynamics have begun to change in 2017, with more than 10 percent sold from what has been offered. Auctions are now being held twice a week. Since the beginning of the Chinese marketing year in July 2017, nearly 5 million tons of paddy has been sold at prices ranging $300 to $470/mt. Recent auctions confirm that rice even from the 2013 crop is still held in the state reserves in large quantities. The quality of rice in large government-held stocks is unknown.

China’s challenge of large stocks is not unique to rice. Similarly, China wheat stocks are currently seen to be exceptionally large, set to exceed annual use this year. Corn stocks hit a peak in 2015/16, but have since been in decline after the government removed the minimum purchase price. Likewise, this is not the first time that the country has struggled with enormous quantities of rice. A similar and even larger amount was held in the late 1990s.

The updated consumption and stocks statistics imply a 61 percent stocks-to-use ratio within China at the end of 2016/17 and the is expected to rise to 65 percent by the end of 2017/18.

Selected Trade Changes for 2018

  • Burma exports are raised 100,000 tons to 2.1 million on expectations of stronger demand for competitively priced rice in bordering countries.
  • Bangladesh imports are up 200,000 tons to 1.2 million on a smaller crop. Production is now forecast at the lowest since 2010/11.
  • Ghana imports are down 125,000 tons to 550,000 on a larger crop.
  • Nigeria imports are lifted 200,000 tons to 2.3 million tons on prospects of continued consumption growth in line with prior years.
  • Philippines imports are trimmed 100,000 tons to 1.7 million based on limitations set by the government on import arrival times.

Selected Trade Changes for 2017

  • Bangladesh imports are up 100,000 tons to 1.1 million, reflecting continued tenders for emergency purchases.
  • Ghana imports are lowered 150,000 tons to 500,000 on the pace of trade.
  • Nigeria imports are up 200,000 tons to 2.4 million on greater demand for parboiled rice within urban centers.
  • Philippines imports are cut 500,000 tons to 1.1 million based on government announcements that the Minimum Access Volume imports will be allowed beginning in late December.