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USDA Rice Outlook


12 December 2013

USDA Rice Outlook - December 2013USDA Rice Outlook - December 2013


USDA Rice Outlook

Revisions to the U.S. 2013/14 U.S. rice balance sheet were minor this month. On the supply side, the 2013/14 import forecast was lowered 1.0 million cwt to 21.0 million cwt, virtually unchanged from a year earlier. The smaller import forecast lowered the total supply forecast to 246.2 million cwt, 6 percent smaller than in 2012/13.

There were no changes to the use side of the 2013/14 U.S. rice supply and use table. Total use of U.S. rice in 2013/14 remains projected at 216.0 million cwt, 4 percent below a year earlier. Total domestic and residual use of all rice in 2013/14 remains projected at 116.0 million cwt, 2 percent less than a year earlier. Total exports in 2013/14 remain projected at 100.0 million cwt, 7 percent below a year earlier. The ending stocks forecast was lowered 1.0 million cwt to 30.2 million cwt, 17 percent below last year.

The 2013/14 season-average farm price (SAFP) range for U.S. long-grain rice was raised 30 cents on both the high and low-end to $14.80-$15.80 per cwt. The combined medium- and short-grain 2013/14 U.S. SAFP remains forecast at $16.80-$17.80 per cwt.

Global rice production for 2013/14 is forecast at a record 470.6 million tons (milled basis), down 2.6 million tons from last month’s forecast but still up fractionally from a year earlier. Production forecasts were lowered for India, the Philippines, and Thailand, but raised for Iran and Peru. Global rice use (including a residual component) for 2013/14 is projected at a record 472.9 million tons, virtually unchanged from the previous forecast. The 2013/14 global ending stocks forecast was lowered 2.3 million tons to 104.3 million tons.

Total calendar year 2014 global rice trade is forecast at a record 39.8 million tons, up 0.65 million tons from the previous forecast, with export forecasts raised for Thailand and the U.S. Import forecast for 2014 were raised for the Philippines and the EU, but lowered for Iran and the United States.

 Prices for most grades of Thailand’s high-, medium-, and lower quality, regular-milled white rice have changed little over the past month. In contrast, price quotes from Vietnam continue to increase, mostly due to large sales to the Philippines and China, and now exceed Thailand’s prices. U.S. prices for long-grain milled rice have increased slightly since early mid-November while prices for U.S. long-grain rough-rice remain unchanged. Prices for California milled rice for the U.S. market are down slightly from a month earlier.

U.S. 2013/14 Import Forecast Lowered to 21.0 Million Cwt

The only supply side revision this month was a 1.0-million cwt reduction in the 2013/14 U.S. rice import forecast to 21.0 million cwt, virtually unchanged from a year earlier and the third highest on record. The downward revision was based on deliveries through October and expectations for the remainder of the market year. Through October, shipments from Southeast Asia—the largest source of U.S. rice imports—were behind a year earlier.

Long-grain accounted for all of the downward revision in imports. At 18.5 million cwt, long-grain imports in 2013/14 are 1 percent below a year earlier but still the second largest on record. Thailand is the largest supplier of long-grain rice to the U.S., shipping its premium jasmine rice, an aromatic, almost exclusively. India and Pakistan are typically the next largest suppliers, with their premium basmati rice accounting for nearly all of their sales to the U.S. In some years, Vietnam has shipped more than 1 million cwt of rice to the U.S., mostly broken kernels. Combined medium- and short-grain rice imports remain forecast at 2.5 million cwt, fractionally higher than a year earlier. Specialty rice from Thailand accounts for the bulk of U.S. imports of medium- and short-grain rice. Arborio rice from Italy accounts for most of the remainder.

The 2013/14 U.S. rice crop remains projected at 188.7 million cwt, more than 5 percent below a year earlier, a result of an 8-percent drop in harvested area to just 2.46 million acres, the smallest since 1987/88. Higher returns for competing crops, weather problems in the Delta early in the season, and water restrictions in Texas were behind the area decline. Arkansas and Missouri account for all of the 2013/14 area decline.

The weaker acreage was partially offset by a 3-percent increase in the average yield to 7,660 pounds per acre, the highest on record. Favorable weather throughout most of the season in California, continued adoption of hybrid varieties in the South, and a cooler than normal late summer in much of the South were behind the record yield. Record yields were reported this year for Arkansas, Louisiana, Mississippi, and Texas.

By class, the U.S. 2013/14 long-grain crop remains projected at 129.0 million cwt, almost 11 percent below a year earlier and the second smallest since 1997/98. Combined medium- and short-grain production remains projected at 59.7 million cwt, 8 percent larger than a year earlier. Total rice production is projected smaller than a year earlier in Arkansas and Missouri. In contrast, California, Louisiana, Mississippi, and Texas are projected to harvest larger rice crops in 2013/14. The 2013/14 carryin remains estimated at 36.4 million cwt, 11 percent smaller than a year earlier.

The 2013/14 long-grain carryin remains estimated at 21.9 million cwt, 10 percent below a year earlier. Combined medium- and short-grain carryin remains estimated at 12.2 million cwt, 17 percent below a year earlier. Stocks of brokens are not specified by class.

Total U.S. rice supplies in 2013/14 are projected at 246.2 million cwt, 1.0 million cwt below November’s forecast and 6 percent smaller than a year earlier and the smallest U.S. rice supplies since 2003/04. Long-grain total supplies are forecast at 169.4 million cwt, 1.0 million cwt below last month’s forecast and more than 9 percent below a year earlier. Combined medium- and short-grain total supplies remain forecast at 74.4 million cwt, 3 percent above a year earlier, a result of a larger crop.

U.S. 2013/14 Rice Exports Forecast To Drop 7 Percent

There were no changes to the use side of the 2013/14 U.S. rice supply and use table. Total use of U.S. rice in 2013/14 remains projected at 216.0 million cwt, 4 percent below a year earlier. Long-grain total use remains projected at 152.0 million cwt, 8 percent below a year earlier. Combined medium- and short-grain use remains projected at 64.0 million cwt, almost 7 percent above a year earlier.

Total domestic and residual use of all rice in 2013/14 remains projected at 116.0 million cwt, 2 percent less than a year earlier. The projected decline is partially based on a smaller residual use component associated with a smaller crop. The residual accounts for unreported losses in marketing, processing, and transporting, as well as offsetting any statistical error in another account. Long-grain domestic and residual use remains projected at 84.0 million cwt, 6 percent below a year earlier. Combined medium- and short-grain domestic and residual use remains projected at 32.0 million cwt, 11 percent higher than a year earlier.

grain exports remain projected at 68.0 million cwt, 11 percent below a year earlier. grain exports, with Egypt the main competitor for the United States in these two regions.

By type, rough-rice exports remain projected at 35.0 million cwt, up 0.8 million cwt from a year earlier. Latin America is expected to remain the top market for U.S. rough-rice exports, with Mexico, Central America, and northern South America the top buyers. Southern long-grain accounts for nearly all of the U.S. rough-rice shipments to the region. Turkey and Libya account for the bulk of U.S. mediumand short-grain rough-rice exports.

Combined milled- and brown-rice exports (on a rough basis) remain projected at 65.0 million cwt, 11 percent below a year earlier. Northeast Asia, Canada, the Middle East, Sub-Saharan Africa, and the Caribbean are the top markets for U.S. milled-rice exports. The Caribbean and Sub-Saharan Africa are expected to account for the bulk of the decline in U.S. milled-rice exports in 2013/14, primarily due to stronger competition from lower priced Asian suppliers.

Through November 28, data from the weekly U.S. Export Sales report indicate that combined U.S. commercial shipments and outstanding sales were 6 percent behind a year earlier, down from 13 percent behind in late October. Since late October, the pace of new sales has increased from the pace earlier in the market year, with outstanding sales just 2 percent behind a year earlier by November 28. U.S. sales in November were especially strong to Japan, Mexico, and Turkey.

By class and type, combined outstanding sales and exports of long-grain rough-rice were 15 percent behind a year earlier for the week ending November 28, while medium- and short-grain rough-rice outstanding sales and exports were 71 percent ahead of a year earlier. Turkey and Libya account for almost all U.S. exports of medium- and short-grain rough-rice exports. The market for milled rice is similar, with long-grain milled-rice exports almost 6 percent behind a year earlier for the week ending November 28, and combined medium- and short-grain milled rice exports 8 percent ahead of a year ago. Northeast Asia is the top market for U.S. medium- and short-grain milled-rice exports.

U.S. ending stocks of all rice in 2013/14 are projected at 30.2 million cwt, down 1.0 million cwt from the November forecast and 17 percent below a year earlier. These are the lowest U.S. ending stocks since 2007/08. The stocks-to-use ratio is calculated at 14.0 percent, down from 16.2 percent in 2012/13.

By class, the 2013/14 U.S. long-grain carryout remains projected at 17.4 million cwt, 1.0 million cwt below last month’s forecast and 20 percent smaller than a year earlier. The long-grain stocks-to-use ratio is calculated at 11.5 percent, down from 13.2 percent a year earlier and the lowest since 2007/08.

The medium- and short-grain carryout remains projected at 10.4 million cwt, 15 percent below a year earlier. The medium/short-grain stocks-to-use ratio is calculated at 16.2 percent, down from 20.4 percent in 2012/13 and the lowest since 2008/09.

U.S. 2013/14 Season-Average Farm Price Forecast

Raised for Long-grain Rough-rice Rice

The 2013/14 season-average farm price (SAFP) for U.S. long-grain rice is forecast at $14.80-$15.80 per cwt, up 30 cents on both the high and low end from the previous forecast and higher than the $14.40 per cwt SAFP a year earlier. The upward revision is based on reported cash prices and sales through October and expectations regarding prices the remainder of the marketing year. On an annual basis, the impact of tighter U.S. supplies is expected to more than offset the effects of larger exportable supplies in Asia. The combined medium- and short-grain 2013/14 U.S. SAFP remains forecast at $16.80-$17.80 per cwt, compared with a 2012/13 SAFP for medium- and short-grain of $16.70 per cwt.

In late November, NASS reported a mid-November U.S. long-grain rough-rice price of $15.50 per cwt, up 10 cents from the revised October estimate. The November long-grain price is the highest since January 2009. The October longgrain price was lowered 20 cents to $15.40 per cwt. For combined medium- and short-grain rice, the mid-November NASS price was reported at $17.00 per cwt, up $1.10 from the revised October price. The October price was lowered $2.90 from the midmonth estimate to $15.90 per cwt.

International Outlook 

Production Forecasts for 2013/14 Lowered for India, the Philippines, and Thailand

Global rice production for 2013/14 is forecast at a record 470.6 million tons (milled basis), down 2.6 million tons from last month’s forecast but still up fractionally from a year earlier. This is the second consecutive month of a significant reduction in the 2013/14 global production forecast, with India again accounting for the bulk of the downward revision. On a year-to-year basis, both East Asia and Southeast Asia are projected to produce record rice crops.

The bumper global crop is the result of expanded area in 2013/14. At a record 160.1 million hectares, global rice area in 2013/14 is up 2.7 million hectares from a year earlier. Burma, Cambodia, China, India, Nigeria, and Pakistan account for most of the year-to-year area increase. Much of this area expansion is driven by higher Government support prices. The average global yield, forecast at 4.38 tons per hectare (on a rough-rice basis), is about 1 percent below the 2012/13 record. The yield decline is partly due to adverse weather in China and India, the world’s two largest rice producing countries.

There were several significant downward revisions to 2013/14 crop forecasts this month, mostly in Asia and South America. First, India’s 2013/14 production forecast was lowered 2.0 million tons to 103.0 million tons based on a weaker yield resulting from recent cyclones in the eastern coast and heavy rains that damaged the standing rice crop, which was at maturity and harvest stage, in eastern and southern States. Since early October, three consecutive cyclones (Phaillin, Helen, and Lehar) have hit the eastern coast and caused significant damage to the rice crop in the coastal belt of Andhra Pradesh and Orissa. Heavy rains in the eastern states of West Bengal, Bihar, Jharkhand and eastern Uttar Pradesh have caused some crop lodging as well. This analysis is largely based on information from the U.S. Agricultural Office in New Delhi. Although slightly smaller than the 2012/13 crop, India’s 2013/14 production is still the third largest on record.

In East Asia, North Korea’s 2013/14 production forecast was raised 100,000 tons to 1.8 million tons based on a higher yield resulting from favorable weather from August through October, despite a very wet summer. This is North Korea’s largest crop since 2006/07. Despite this year’s larger crop, production remains well below record levels achieved in the 1980s, with both area and yield lower. Lack of inputs has been a major problem for North Korea’s agricultural sector since the end of the Cold War. South Korea’s 2013/14 production forecast was raised 62,000 tons to 4.23 million tons based on information from the U.S. Agricultural Office in Seoul indicating a slightly higher yield reported by the Government of South Korea. The crop is up almost 6 percent from a year earlier despite the smallest area in well over 50 years. In Southeast Asia, Thailand’s 2013/14 production forecast was lowered 600,000 tons to 20.5 million tons based on recommendations from the Agricultural Office in Bangkok indicating smaller area due to a decrease in the planting of the off-season irrigated rice crop, water shortages, and a less attractive pledging program due to Government financial resources. The flood damage during September and October was marginal as it was confined to recurring flood areas along river banks,  particularly in the northeastern region. Despite the downward revision, the crop is slightly above a year earlier and the highest on record.

The 2013/14 production forecast for the Philippines was lowered 60,000 tons to 11.64 million tons based on information from the U.S. Agricultural Office in Manila indicating a 100,000-hectare reduction in area caused by Super Typhoon Haiyan, which struck the central Philippines in early November. Despite the severity of the typhoon, the crop loss was minor because the central Islands grow only a small share of the country’s total annual rice crop and the bulk of the fall crop in the region was already harvested. However, the degree of damage to stored rice, equipment, and other agricultural infrastructure is not known with certainty. Despite this month’s downward revision, total production is still the highest on record and 2 percent larger than a year earlier.

In South America, Colombia’s 2013/14 production forecast was lowered 50,000 tons to 1.3 million tons based on information from the U.S. Agricultural Office in Bogota indicating a slightly lower yield. Bolivia’s 2013/14 forecast was lowered 20,000 tons to 310,000 tons based on FAO data indicating a weaker yield. In contrast, Peru’s 2013/14 production forecast was raised 34,000 tons to 2.04 million tons based on slightly more area and a fractionally higher yield reported by FAO. Weather in Peru was quite favorable late in the season.

In other regions, Spain’s crop was lowered 39,000 tons to 581,000 tons, primarily due to a weaker yield reported by the Government. Finally, Iran’s 2013/14 crop forecast was raised 66,000 tons to 1.65 million tons based a slightly larger area estimate. This is the largest crop for Iran since 2007/08.

Global rice production in 2012/13 is estimated at 469.0 million tons, virtually unchanged from last month’s estimate but almost 1 percent larger than a year earlier. The only major revisions were in South America, with a smaller crop estimate in Colombia virtually offsetting a higher estimate for Peru. In addition, Australia’s 2012/13 crop estimate was raised 5,000 tons to 840,000 tons based on Government data indicating a slightly higher yield. Spain’s crop was lowered 3,000 tons to 617,000 tons.

Global rice use (including a residual component) for 2013/14 is projected at a record 472.9 million tons, virtually unchanged from the previous forecast but up more than 1 percent from a year earlier. On an annual basis, Bangladesh, Cambodia, China, Egypt, India, Indonesia, and Vietnam account for most of the projected increase in global consumption in 2013/14. In contrast, consumption (including a residual component) is projected to decline in 2013/14 in Japan, South Korea, and the United States. Consumption has declined for several decades in both Japan and South Korea due to diet diversification.

Global ending stocks for 2013/14 are projected at 104.3 million tons, down 2.3 million tons from the previous forecast and from 2012/13. India and Thailand account for the bulk of this month’s downward revision in global ending stocks. On a year-to-year basis, Thailand is projected to carry higher ending stocks in 2013/14, estimated at a record 14.4 million tons, while China, India, Indonesia, the United States, and Vietnam are projected to have smaller ending stocks.

The global stocks-to-use ratio for 2013/14 is calculated at 22.1 percent, down slightly from a year earlier.

Export Forecasts for 2014 Raised for Thailand and the United States 

Total calendar year 2014 global rice trade is forecast at a record 39.8 million tons, up 0.65 million tons from the previous forecast and 1.46 million tons above this year. Global trade in 2014 will mainly be driven by strong shipments to China and West Africa. India is projected to again be the largest exporter, with Thailand and Vietnam expected to increase exports.

There were two revisions in the 2014 export forecast this month, both upward. First, Thailand’s 2014 export forecast was raised 500,000 tons to 8.5 million tons based on stronger global demand and plenty of supplies. This will make Thailand the second largest exporter. Second, the 2014 U.S. export forecast was increased 150,000 tons to 3.35 million tons based on the timing of 2013/14 U.S. shipments.

There were several revisions in 2014 import forecasts this month. On the upward side, the EU’s 2014 import forecast was raised 150,000 tons to 1.35 million tons based on expectations that the stronger pace of 2013 will continue. Also, the Philippines’ 2014 import forecast was raised 100,000 tons to 1.2 million tons based on early estimates of losses caused by Super Typhoon Haiyan and announcements by the Government regarding additional imports. Finally, Bolivia’s 2014 import forecast was raised 20,000 tons to 40,000 tons based on a smaller crop. In contrast, Iran’s 2014 import forecast was cut 100,000 tons to 1.65 million tons based on a larger crop. The U.S. 2014 import forecast was lowered 25,000 tons to 700,000 tons based on the recent slower pace of purchases.

The 2013 total global rice trade forecast was lowered less than 0.1 million tons to 38.4 million, 2 percent below a year earlier. There were two revisions in 2013 export forecasts this month. First, the U.S. 2013 export forecast was lowered 150,000 tons to 3.25 million tons based on a slower than expected pace of shipments early in the 2013/14 market year. This reduction was partially offset by a 75,000-ton increase in China’s exports to 425,000 tons based on shipment pace.

There were several significant upward revisions in 2013 import forecasts this month, mostly based on shipment pace. The EU’s 2013 import forecast was raised 100,000 tons to 1.3 million tons and Iran’s forecast was increased 100,000 tons to a record 1.9 million tons. In addition, the Philippines’ 2013 import forecast was raised 100,000 tons to 1.1 million tons based on Government statements regarding additional imports resulting from typhoon damage in early November. These upward revisions were partially offset by two reductions. First, the U.S. export forecast was lowered 50,000 tons to 650,000 tons based on shipment data through October. Second, South Korea’s

2013 import forecast was lowered 40,000 tons to 600,000 based on Government trade data.

Little Change in Thailand’s Export Price,Vietnam’s Prices Continue To Rise

 Prices for most grades of Thailand’s high-, medium-, and lower quality, regularmilled white rice have changed little over the past month, as impacts from a weaker baht, lack of new sales, higher domestic prices, and harvest of the main season crop have largely offset each other. Prices for parboiled rice have increased due to large sales to Nigeria, while prices for aromatic rice have decreased. Both parboiled and aromatic rice are specialty rices.

Prices for Thailand's high-quality, 100-percent Grade B (fob vessel, Bangkok) milled rice for export were quoted at $430 per ton for the week ending December 9, down just $4 from the week ending November 11. Prices are now the lowest since January 2008. Prices for Thailand’s 5-percent brokens were quoted at $415 per ton for the week ending December 9, down only $1 from the week ending November 11. In contrast, Prices for Thailand's 5-percent parboiled rice were quoted at $454 per ton for the week ending December 9, up $11 from the week ending November 11.

Prices for Thailand’s brokens have remained unchanged as well. For the week ending December 9, prices for Thailand’s A-1 Super 100-percent brokens were quoted at $385 per ton, unchanged since mid-October. Price quotes for Thailand’s premium jasmine rice, an aromatic variety, were quoted at $1,090 per ton for the week ending December 10, down $50 from the week ending November 11. All price quotes for Thailand’s rice are from the Weekly Rice Price Update, reported by the USDA office in Bangkok.

In contrast, price quotes from Vietnam continue to increase, mostly due to recent large sales to the Philippines and China, and now exceed Thailand’s prices. For the week ending December 10, prices for Vietnam’s 5-percent double-water-polished with 5-percent brokens were quoted at $430 per ton, up $30 from November 12. Thailand’s price quotes for 5-percent brokens are currently $15 per ton below quotes for Vietnam’s 5-percent double-water-polished milled rice. This is uncommon, as Thailand’s prices typically exceed prices for similar grades of rice from Vietnam by around $50 per ton.

U.S. prices for long-grain milled rice have increased slightly since mid-November, as U.S. exports have increased and expectations are for tight ending stocks of longgrain rice. For the week ending December 10, prices for high-quality U.S. Southern long-grain rice (No. 2, 4-percent brokens, bagged, free alongside vessel, U.S. Gulf port) were quoted at $595 per ton, up $5 from the week ending November 11. The U.S. price difference (adjusted to reflect a free-on-board vessel location) over Thailand’s 100 percent grade B is $180 per ton, the highest on record and likely to limit U.S. sales in certain markets, especially in the Middle East and Sub-Saharan Africa. Prices for U.S. long-grain rough-rice (bulk, fob vessel, New Orleans) remain quoted at $380 per ton for the week ending December 10, unchanged since late September.

Prices for California milled rice for the U.S. market are down slightly from a month earlier. California’s package-quality medium-grain rice (bulk) for domestic sales to processors and repackagers was quoted at $628 per ton for the week ending December 10, down $11 from early November. In contrast, export prices (sacked, port of Oakland) for California milled rice remain quoted at $675 per ton for the week ending December 10, unchanged since late September. Medium-grain milled rice prices in both the domestic and global markets have declined since the start of the 2013/14 market year, partly due to larger U.S. supplies. Price quotes for Vietnam, U.S. long- and medium-grain milled-rice prices, and U.S. rough-rice export prices are from the weekly Creed Rice Market Report.

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