Rice. World Markets and Trade. September 2018 – USDA Sept. 12, 2018
OVERVIEW FOR 2018/19
Global rice production is down slightly from the prior year’s record and is lowered this month on a smaller crop in China. Global consumption is forecast slightly higher, particularly for India. Ending stocks are raised from last month, but nonetheless show a year-to-year decline. Global trade is raised slightly with higher imports forecast for Venezuela and the Philippines.
OVERVIEW FOR 2017/18
Global rice production and consumption are adjusted higher this month on larger supplies in India. Global ending stocks are raised, primarily for India. Global trade is nearly unchanged as larger exports for India and Uruguay more than offset smaller exports for Burma.
Global: U.S. FOB export quotes for long-grain milled rice (bagged) have finally dampened to $550/ton on the ongoing harvest and generally favorable production prospects. The quotes remain slightly above South American suppliers such as Uruguay, still quoted around $520/ton. Meanwhile, nearly all the major Asian exporters are quoting slightly below $400/ton on tough competition and abundant supplies.
Venezuela 2018 Rice Purchases Up, Mostly Sourced from Brazil
In the first seven months of 2018, Venezuela has imported more rice than all of 2017. Purchases were particularly large ahead of the May 2018 elections. The suppliers to Venezuela are markedly different than they were in past years. Typically, the United States has been the largest supplier of paddy rice. Given the tight 2017/18 supplies, U.S. prices were significantly higher in the first part of 2018, allowing South American paddy suppliers such as Brazil and Uruguay to make significant gains in market share. Brazil was the primary supplier for the first portion of the year as its paddy prices have been significantly lower amid ample supplies. The strong shipments to Venezuela have been one factor enabling Brazil to soar to its highest exports in 6 years. Likewise, Uruguay has benefitted from large exports to Venezuela, primarily in paddy form, now its third-largest market. Venezuelan milled rice imports have been mainly from Mexico.
Looking ahead to the remainder of the year, the United States is expected to regain competitiveness in Venezuela and began shipping new-crop paddy rice in August. Given the continuing macroeconomic challenges and hyperinflation of around one million percent, the pace of imports is expected to slow somewhat in the coming months. Annual imports are expected to reach 500,000 tons in 2018.