India and Thailand Drive Record Global RiceTrade in 2014

Global rice trade expanded 9 percent to a record 43 million tons in 2014, supported by abundant exportable supplies in India and Thailand, lower prices, and strong demand. With a record crop and large stocks, India actively pursued markets overseas. Thailand also aggressively sought export opportunities to reduce massive stocks from the discontinued Paddy Pledging Scheme. Competition from these two countries pushed prices down and stimulated imports, but squeezed opportunities for other exporters, especially Vietnam, Pakistan, and the United States.

For 2015, global trade is forecast to be marginally lower as India's smaller crop and use in the Public Distribution System are expected to curb exports. Increased trade by Vietnam, Pakistan, and the United States are expected to partially offset the slowdown from India. Thailand's exports are forecast to remain strong due to government-led sales. The impact from ongoing dry weather on exportable supplies is expected to be minimal as the country has ample stocks. Global trade is forecast to remain strong spurred by declining prices.

RICE: WORLD MARKETS AND TRADE

OVERVIEW

Global production for 2014/15 is revised lower on a reduced crop in Thailand, where ongoing drought has cut area for the off-season crop. Global trade is also down marginally. Global consumption, although lower than last month, still outpaces production, tightening stocks. U.S. exports are unchanged.

U.S. and Thai Quotes Move Closer

U.S. quotes for long-grain milled rice (#2/4) continue to drop, and are the lowest since April 2012. Exportable supplies remain ample, but sales and shipments outside traditional markets have been slow, weighing on prices. In comparison, prices for Thai 100B have weakened only marginally in the last month, despite the one million ton tender from government stocks. The price gap between these two has narrowed slightly in the past few weeks to below $100 per ton, FOB, improving the competitiveness of U.S. rice.

SELECTED TRADE CHANGES For 2014

Selected Exporters

  • Argentina is down 106,000 tons to 494,000 on final trade data.
  • India is up 300,000 tons to a record 10.8 million on preliminary December data.
  • Pakistan is down 500,000 tons to 3.4 million on a slower pace.
  • Thailand is up 669,000 to a record 11.0 million on final data.
  • Vietnam is down 175,000 tons to 6.3 million on final data.

Selected Importers

  • China is up 200,000 tons to 4.1 million on larger shipments from Thailand and Burma.
  • Iraq is down 350,000 tons to 1.1 million reflecting a larger crop and slower purchases.
  • Nepal is up 100,000 tons to 450,000 on stronger shipments from India.
  • Sri Lanka is up 200,000 tons to 500,000 on larger shipments from India.

SELECTED TRADE CHANGES for 2015

  • Thailand's exports are cut 300,000 tons to 11.0 million on a reduced crop.
  • Bangladesh's imports are up 100,000 tons to 600,000 on expectations of continued strong demand.
  • Iraq's imports are down 200,000 tons to 1.3 million on a larger crop