Rice. World Markets and Trade. November 2017 – USDA Nov. 9, 2017
Record Rice Trade with Diversifying Suppliers
In 2017, rice trade is set to hit a new record, with only a slight decline forecast for next year. Import demand is primarily supported by expanding consumption in Africa and the Middle East with growing populations and changing diets. China remains the largest importer, primarily supplied by neighboring regions. Weather-induced production shortages in Bangladesh and Sri Lanka sparked sudden import demand this year, sending rice trade to a record.
The top exporter is India, as it has been since 2012 after it removed its non-basmati export ban. Meanwhile, Thai exports are forecast to hit a record in 2017, spurred by sales from government-held stocks which have now been nearly depleted. Vietnam has seen an uptick in sales, not only to China, its largest buyer, but also to regional markets and Africa. These top three exporters account for nearly two-thirds of global exports, and together with the next largest exporters, Pakistan and the United States, account for nearly 80 percent of trade.
But this year has seen the further rise of emerging and returning suppliers. Burma is set to ship volumes not witnessed since before WWII, as they fulfill demand in neighboring China, supply Europe under the Everything but Arms Agreement, and make inroads into African markets. Cambodia has steadily increased exports and recently secured a tender to Bangladesh, demonstrating its expanding reach. Meanwhile, China as the top importer is also interestingly becoming a sizable exporter, reaching primarily African markets this year with low-priced rice. China has not shipped this quantity to Africa since the early 2000s. An expansion of global rice trade has brought about more opportunities for the largest exporters, but the growth of these secondary players is changing the competitive landscape.
For 2017/18, global production is lowered this month on a smaller Indian crop. Trade is forecast up slightly to a near record, with higher imports in several African countries. Exports are raised for Burma, Vietnam, and Thailand in contrast to lower forecasts for Pakistan and India. Global stocks are down, primarily in India, but remain the highest since 2000/01.
Over the past month, the top Asian exporters’ FOB quotes have converged to $400/ton, with only a small amount of variance. This is indicative of strong competition among these suppliers during this year of record trade. Meanwhile, the divergence between quotes for Western Hemisphere and Asia has widened to the largest level all year. The Uruguay quote is at $525/ton while the U.S. quote is at $565/ton.
U.S. Rice Market Share Declines in Mexico while South America Expands
Mexico is the largest rice importer in the Western Hemisphere and the top market for U.S. rice. While the United States is the main supplier of both paddy and milled rice to Mexico, most U.S. exports are paddy rice. Historically, the United States had captured increasing market share throughout the 1990s as tariffs were eliminated through NAFTA.
Over the past few years, this trend has been shifting in both paddy and milled rice sales. For milled rice, the United States has been the leading supplier, but beginning in 2011 other competitors began shipping significant amounts. While Asian suppliers briefly supplied the market, more recently it has been South American competitors that have gained ground. Uruguay had 8 percent market share in 2016 and has increased market share to 15 percent year to date. Uruguay has the similar advantage as the United States of a zero duty on milled rice. On the paddy side, the United States had maintained an almost 100 percent market share with little competition. However, a new paddy competitor has emerged, with Guyana beginning to ship to Mexico in July 2017. Guyana normally sells under a 9 percent tariff rate but can enter the market duty free through December 2017 under a 150,000 MT TRQ. Mexico implemented this quota available to all origins in March 2017 in an effort to diversify supplies, causing further concern for U.S. suppliers.
Selected Trade Changes for 2018
- Burma exports are raised 500,000 tons to 2.6 million on expectations of stronger demand for competitively priced rice in bordering countries.
- China exports are up 100,000 tons to 1.1 million on continued growth in African markets.
- India exports are down 200,000 tons to 11.6 million on a smaller crop.
- Pakistan exports are lowered 300,000 tons to 3.8 million on higher competition from alternative suppliers.
- Thailand exports are raised 200,000 tons to 10.2 million on improved prospects relative to India.
- Vietnam exports are lifted 300,000 tons to 6.3 million on expected higher shipments to nearby markets.
Selected Trade Changes for 2017
- Burma exports are boosted 400,000 tons to 2.8 million, the highest level since the pre-WWII record, on exceptionally high shipments not only along the border to China and Bangladesh but also to Africa.
- China exports are up 200,000 tons to 1.1 million on higher exports to Africa, which have constituted more than half of its exports thus far.
- India exports are raised 200,000 tons to 11.4 million on strong regional shipments.
- Kenya imports are up 100,000 tons to 650,000 reflecting continued large purchases from Pakistan and Thailand.
- Malaysia imports are raised 100,000 tons to 1.0 million on the pace of trade.
- Mozambique imports are boosted 100,000 tons to 750,000 on additional imports from Pakistan.
- Nigeria imports are up 100,000 tons to 2.5 million on expanding demand for parboiled rice from Thailand and India.
- Pakistan exports are lowered 300,000 tons to 3.6 million on uncompetitive prices relative to other suppliers.
- Thailand exports are raised 500,000 tons to a record 11.0 million on large shipments to Nigeria and other African countries.
- Sierra Leone imports are raised 100,000 tons to 400,000 on strong shipments from China.
- Vietnam exports are up 200,000 tons to 6.3 million on strong regional trade.
|Rice, Milled World as of November 2017||17/18 Nov'17||Change||17/18 Oct'17||16/17||15/16||14/15||13/14|
|Area Harvested (1000 HA)||160,025||-1825(-1.13%)||161,850||160,738||159,462||161,006||161,850|
|Beginning Stocks (1000 MT)||138,107||-100(-.07%)||138,207||132,609||127,769||122,027||118,730|
|Milled Production (1000 MT)||481,195||-2602(-.54%)||483,797||486,565||472,569||479,155||478,540|
|Rough Production (1000 MT)||717,935||-3908(-.54%)||721,843||725,729||704,550||714,455||713,635|
|Milling Rate (.9999) (1000 MT)||6,702.49||+(+%)||6,702.25||6,704.50||6,707.39||6,706.58||6,705.67|
|MY Imports (1000 MT)||43,331||+615(+1.44%)||42,716||41,050||38,319||41,592||38,712|
|TY Imports (1000 MT)||42,687||+544(+1.29%)||42,143||42,792||37,543||40,193||41,152|
|TY Imp. from U.S. (1000 MT)||0||-||0||0||3,002||3,292||2,852|
|Total Supply (1000 MT)||662,633||-2087(-.31%)||664,720||660,224||638,657||642,774||635,982|
|MY Exports (1000 MT)||44,909||+719(+1.63%)||44,190||45,340||40,244||43,549||43,023|
|TY Exports (1000 MT)||45,102||+683(+1.54%)||44,419||45,713||40,128||42,649||44,123|
|Consumption and Residual (1000 MT)||478,785||-223(-.05%)||479,008||476,777||465,804||471,456||470,932|
|Ending Stocks (1000 MT)||138,939||-2583(-1.83%)||141,522||138,107||132,609||127,769||122,027|
|Total Distribution (1000 MT)||662,633||-2087(-.31%)||664,720||660,224||638,657||642,774||635,982|
|Yield (Rough) (MT/HA)||4.49||+(+.67%)||4.46||4.51||4.42||4.44||4.41|