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USDA Rice Outlook


12 March 2014

USDA Rice Outlook - 12 March 2014USDA Rice Outlook - 12 March 2014


USDA Rice Outlook

The only 2013/14 U.S. supply side revision this month was a 1.0-million cwt increase in total U.S. rice imports to 22.0 million cwt, the second highest on record. The 2013/14 carryin remains estimated at 36.4 million cwt and the 2013/14 U.S. rice crop remains estimated at 189.9 million cwt. Total U.S. rice supplies in 2013/14 are projected at 248.3 million cwt, up 1.0 million cwt from last month’s forecast but the smallest since 2003/04.

Total domestic and residual use of rice in 2013/14 remains projected at 120.0 million cwt, up 1.5 percent from a year earlier. Total exports in 2013/14 remain projected at 100.0 million cwt, 7 percent below a year earlier and the smallest since 2008/09. U.S. ending stocks of rice in 2013/14 are projected at 28.3 million cwt, up 1.0 million cwt from the February forecast but 22 percent below a year earlier and the lowest since 2003/04.

The 2013/14 season-average farm price (SAFP) range for U.S. long-grain rice was revised up to $15.30-$15.90 per cwt from $15.10-$15.70 a month earlier. This is the highest long-grain SAFP on record. The combined medium- and short-grain 2013/14 U.S. SAFP range was revised up to $18.70-$19.30 per cwt from $17.20-$17.80 per cwt last month.

Global rice production for 2013/14 is forecast at a record 474.8 million tons (milled basis), up 3.2 million tons from last month’s forecast. Production forecasts were revised up this month for Burma, China, and India, but lowered for Australia, Indonesia, and Sri Lanka. Global rice use (including a residual component) for 2013/14 is projected at a record 474.1 million tons, up 0.8 million tons from the previous forecast. Total use forecasts for 2013/14 were raised for Burma and India, but lowered for Indonesia. Global ending stocks for 2013/14 are projected at 111.7 million tons, up 6.6 million tons from the previous forecast and the largest ending stocks since 2001/02.

Total calendar year 2014 global rice trade is forecast at a record 41.0 million tons, up more than 0.5 million tons from the previous forecast and 2.3 million tons above 2013. Burma’s export forecast for 2014 was raised 550,000 tons, while Australia’s export forecast was lowered slightly. The 2013 global trade forecast was raised 350,000 tons to 38.7 million tons, mostly due to stronger exports from Burma.

Prices for higher grades of Thailand’s regular-milled white rice are nearly unchanged from a month earlier, after rising a few dollars a ton in late February and early March mostly due to a stronger baht. Price quotes from Vietnamhave increased slightly over the past month. Prices for California milled rice for the U.S. market and global market continue to rise, mostly over concerns of substantially reduced acreage this year resulting from a recorddrought in the State. Price quotes for U.S. long-grain milled rice have risen slightly since early February.

Domestic Outlook 

U.S. 2013/14 Import Forecast Raised to 22.0 Million Cwt

The only 2013/14 supply side revision this month was a 1.0-million cwt increase in total U.S. rice imports to 22.0 million cwt, up 5 percent from a year earlier and second only to the 2007/08 record of 23.9 million cwt. This month’s upward revision, all for medium- and short-grain rice, was based on U.S. Census deliveries through January and expectations regarding imports the remainder of the market year. In December, an unexpected 28,000-ton shipment of brokens from Australia was reported. Australia has shipped only small amounts of rice to the U.S. in recent years. Medium- and short-grain rice account for all of Australia’s rice production and imports.

By class, long-grain imports remain projected at 18.5 million cwt, a decline of 1 percent from a year earlier, but still the second highest on record. Thailand is the largest supplier of long-grain imported rice to the U.S., shipping its premium jasmine rice, an aromatic variety, 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 United States. Combined medium- and short-grain rice imports are forecast at 3.5 million cwt, up 1.0 million cwt from last month’s forecast, 51 percent higher than a year earlier and the largest since 2008/09. Specialty rice from Thailand typically accounts for the bulk of U.S. imports of medium- and short-grain rice.

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.

The 2013/14 U.S. rice crop remains estimated at 189.9 million cwt, down 5 percent from a year earlier. Long-grain production remains estimated at 131.9 million cwt, down 9 percent from a year earlier. Combined medium- and short-grain production remains estimated at 58.0 million cwt, up 5 percent from 2012/13. Rice production was smaller than a year earlier in 2013/14 in Arkansas, Mississippi, Missouri, and Texas.

Total U.S. rice supplies in 2013/14 are projected at 248.3 million cwt, up 1.0 million cwt from last month’s forecast but 5 percent smaller than a year earlier and the smallest U.S. rice supplies since 2003/04. Long-grain total supplies remain forecast at 172.3 million cwt, 8 percent below a year earlier. Combined medium- and short-grain total supplies are forecast at 73.7 million cwt, up 1.0 million cwt from last month’s forecast and 2 percent above a year earlier.

U.S. 2013/14 Rough-Rice Export Forecast Lowered to 35.0 Million Cwt

Total use of U.S. rice in 2013/14 remains projected at 220.0 million cwt, 2 percent below a year earlier, with exports accounting for all of the expected decline. There were no revisions by class. Long-grain total use remains projected at 156.0 million cwt, 6 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, with both domestic use and exports projected higher.

Total domestic and residual use of all rice in 2013/14 remains projected at 120.0 million cwt, up 1.5 percent from a year earlier. Long-grain domestic and residual use remains projected at 89.0 million cwt, nearly unchanged from a year earlier. Combined medium- and short-grain domestic and residual use remains forecast at 31.0 million cwt, 7 percent higher than a year earlier.

Total exports in 2013/14 remain projected at 100.0 million cwt, 7 percent below a year earlier. These are the smallest U.S. rice exports since 2008/09. The expected decline is based on smaller U.S. supplies, a larger price difference over Asian exporters, and abundant supplies in Asia. Central America and Sub-Saharan Africa are expected to account for most of the decline in U.S. exports in 2013/14.

Long-grain exports remain projected at 67.0 million cwt, 12 percent below a year earlier. Through late February, combined shipments and outstanding sales to Central America and Sub-Saharan Africa were behind last year’s pace. The Western Hemisphere accounts for the bulk of U.S. long-grain rice exports, with much of this rice shipped as unmilled rough-rice. Combined medium- and short-grain exports remain projected at 33.0 million cwt, 6 percent above a year earlier. U.S. sales to Turkey have been especially strong this year.

Northeast Asia is the largest market for U.S. medium- and short-grain exports, with Japan, South Korea, and Taiwan accounting for almost all U.S. sales to this region. All purchases by these three countries are the result of annual WTO commitments. The Middle East and North Africa account for most of the remaining U.S. medium- and short-grain exports, with Egypt the main competitor for the United States in these two regions. Australia competes with the United States in Northeast Asia and supplies most of the rice to Oceania.

By type, U.S. rough-rice exports are projected at 35.0 million cwt, down 1.0 million cwt from the previous forecast but still more than 2 percent above a year earlier. Through late February, U.S. rough-rice sales to Central America have trailed the pace of 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. medium- and short-grain rough-rice exports.

Combined milled- and brown-rice exports (on a rough basis) are projected at 65.0 million cwt, up 1.0 million cwt from last month’s forecast but still 11 percent below a year earlier. The upward revision was largely based on recent sales to the Middle East. Northeast Asia, Canada, the Middle East, Sub-Saharan Africa, and the Caribbean remain the top markets for U.S. milled-rice exports. Sub-Saharan Africa is 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 February 27, data from the weekly U.S. Export Sales report indicated that combined U.S. commercial shipments and outstanding sales were almost 8 percent behind a year earlier, about the same pace as a month earlier. By class and type, combined outstanding sales and exports of long-grain rough-rice were 11.5 percent behind a year earlier for the week ending February 27, compared with being 9.1 percent behind a month earlier. In contrast, combined medium- and short-grain rough-rice outstanding sales and exports were 109 percent ahead of a year earlier through February 27, compared with being 142 percent ahead a month earlier. Turkey and Libya account for almost all U.S. exports of medium- and short-grain rough-rice exports. Long-grain milled-rice exports were 18 percent behind a year earlier for the week ending February 27, little changed from a month earlier. Combined medium- and short-grain milled rice exports were 4 percent ahead of those of a year ago compared with being 2 percent behind a month earlier. Northeast Asia is the largest market for U.S. medium- and short-grain milled-rice exports.

U.S. ending stocks of all rice in 2013/14 are projected at 28.3 million cwt, up 1.0 million cwt from the February forecast but 22 percent below a year earlier. These are the lowest U.S. ending stocks since 2003/04. The stocks-to-use ratio is calculated at 12.9 percent, down from 16.2 percent in 2012/13, also the smallest since 2007/08.

By class, the 2013/14 U.S. long-grain carryout remains projected at 16.3 million cwt, 26 percent smaller than a year earlier. The long-grain stocks-to-use ratio remains calculated at 10.4 percent, down from 13.2 percent a year earlier and the lowest since 2003/04.

The medium- and short-grain carryout is projected at 9.7 million cwt, up1.0 million cwt from the February forecast but 21 percent below a year earlier. The medium/short-grain stocks-to-use ratio is calculated at 15.1 percent, down from 20.3 percent in 2012/13 and the lowest since 1998/99.

U.S. 2013/14 Season-Average Farm Price Forecast Raised for Both Classes of Rice

The 2013/14 season-average farm price (SAFP) range for U.S. long-grain rice was revised to $15.30-$15.90 per cwt from $15.10-$15.70 a month earlier, with the mid-point up 20 cents. This is the highest long-grain SAFP on record and compares with a 2012/13 SAFP of $14.50 per cwt. This month’s upward revision was based on monthly cash prices and marketings through January and expectations regarding prices the remainder of the market 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 range was revised up to $18.70-$19.30 per cwt from $17.20-$17.80 per cwt last month, an increase in the midpoint of $1.50. This compares with a 2012/13 SAFP of $17.40 per cwt and is the highest since the 2008/09 record of $24.80. This month’s upward revision was based on monthly reported cash prices and marketings through January and expectations regarding prices the remainder of the market year. Through early March, Northern California has experienced one of the driest winters on record, with reservoir levels extremely low despite recent rains. Concerns over water availability for planting the 2014/15 California crop and continued strong sales to Turkey are putting substantial upward pressure on prices.

In late February, NASS reported a mid-February U.S. long-grain rough-rice price of $15.80 per cwt, up 30 cents from the revised January estimate. The mid-February long-grain price is the highest since December 2008. For combined medium- and short-grain rice, the mid-February NASS price was reported at $20.20 per cwt, up $3.80 from the revised January price and the highest since September 2009. The January price was raised 50 cents from the midmonth estimate to $17.40 per cwt.

International Outlook

Production Forecasts for 2013/14 Raised for Burma, China, and India

Global rice production for 2013/14 is forecast at a record 474.8 million tons (milled basis), up 3.2 million tons from last month’s forecast and almost 1 percent larger than a year earlier. On a year-to-year basis, South Asia and Southeast Asia are projected to produce record rice crops, with near-record crops projected for East Asia and Sub-Saharan Africa. These are the largest rice producing regions in the world.

The bumper global crop is the result of expanded area in 2013/14. At a record 160.6 million hectares, global rice area in 2013/14 is up 0.5 million hectares from last month’s forecast and 2.4 million hectares from a year earlier. Burma and China account for nearly all of this month’s upward revision in global rice area. In contrast, area forecasts for Indonesia and Sri Lanka were lowered. 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 4.41 tons per hectare (on a rough-rice basis), is about 1 percent below the 2012/13 record of 4.45 tons, mostly due to lower yields for China and India caused by adverse weather. These two countries account for about half of global rice production.

There were several significant upward revisions to 2013/14 crop forecasts this month. First, India’s 2013/14 production forecast was raised 2.0 million tons to 105.0 million tons based on information from the U.S. Agricultural Office in New Delhi indicating higher than expected kharif crop rice yields due to good weather. The kharif crop accounts for about 85 percent of India’s total rice production, and much of it is dependent on the timing of the Southwest Monsoon for adequate irrigation. The smaller rabi crop is irrigated and is harvested early in the calendar year. India’s total rice production in 2013/14 is just 0.3 million tons below the 2011/12 record. In nearby Burma, the 2013/14 production forecast was raised almost 1.0 million tons to a record 12.0 million based on a higher area estimate developed by the U.S. Agricultural Office in Bangkok. This month, the U.S. Agricultural Office in Bangkok revised Burma’s annual production estimates for 2010/11-2013/14, raising area and production forecasts each year.

In East Asia, China’s 2013/14 production forecast was raised 0.8 million tons to 142.3 tons based on Government data indicating slightly higher area and yield estimates. China’s rice area is the highest since 1999/2000 and the sixth consecutive year of an increase. However, the crop is still 1 percent below the year-earlier record, primarily due to a lower yield. The late-crop was adversely impacted by drought, and the single crop (the largest of China’s three annual rice crops) was adversely affected by flooding in the northeast. Outside Asia, Peru’s 2013/14 crop was raised 121,000 tons to a record 2.16 million tons based on information from the U.S. Agricultural Office in Lima reporting a record yield. Argentina’s 2013/14 production was raised 33,000 tons to 1.01 million based on a higher area estimate.

These upward revisions were partially offset by three reductions, with the largest revisions in Asia. First, Indonesia’s 2013/14 production forecast was lowered 365,000 tons to 37.34 million tons based on information from the U.S. Agricultural Office in Jakarta, which reported smaller area for the main-crop that will be harvested this spring due to major floods that hit the northern coastal parts of Java in February. Indonesia’s rice production remains below the 2008/09 record. Second, Sri Lanka’s 2013/14 production forecast was lowered 300,000 tons to 2.75 million tons based on Government data reporting a much smaller maha crop caused by drought. The maha crop, harvested in March-April, is the larger of Sri Lanka’s two annual rice crops, accounting for almost 65 percent of production. Finally, Australia’s 2013/14 production forecast was lowered 27,000 tons to 653,000 tons based on a lower yield caused by drought. The harvest of Australia’s 2013/14 rice crop will begin next month.

Global rice production in 2012/13 is estimated at 471.5 million tons, up 2.0 million tons from the previous forecast and 1 percent larger than a year earlier. The bumper global crop was largely due to a record crop in China and near-record crops in India and Southeast Asia. There were two significant upward revisions this month. First, Burma’s 2012/13 crop estimate was raised 1.05 million tons to 11.72 million tons based on a reevaluation of the 2010/11-2013/14 production series by the U.S. Agricultural Office in Bangkok. The 2012/13 area estimate for Burma was raised 690,000 hectares to 7.04 million hectares. Second, India’s 2013/14 production estimate was raised 840,000 tons to a near-record 105.2 million tons based on Government data indicating a higher yield. In contrast, Malaysia’s 2012/13 crop estimate was slightly lowered due to a weaker yield.

Global rice use (including a residual component) for 2013/14 is projected at a record 474.1 million tons, up 0.8 million from the previous forecast and more than 1 percent larger than a year earlier. Total use forecasts for 2013/14 were raised for Burma and India, but lowered for Indonesia. Burma and India’s consumption forecasts were raised based on larger supplies. Indonesia’s annual consumption estimates were lowered for 2010/11-2013/14 based on smaller population estimates reported by the Government of Indonesia. On an annual basis, Bangladesh, Brazil, Cambodia, China, Egypt, India, Indonesia, the United States, 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 South Korea due to diet diversification.

Global ending stocks for 2013/14 are projected at 111.7 million tons, up 6.6 million tons from the previous forecast and 0.7 million tons above a year earlier. These are the largest ending stocks since 2001/02 and the seventh consecutive year of increasing global ending stocks. Ending stocks forecasts were raised for Argentina, Burma, China, India, Indonesia, and the United States. On a year-to-year basis, Thailand is projected to carry higher ending stocks in 2013/14, estimated at a record 14.7 million tons, accounting for most of the year-to-year global increase. The global stocks-to-use ratio for 2013/14 is calculated at 23.6 percent, down slightly from a year earlier.

Global Rice Trade in 2014 Is Projected at a Record 41.0 Million Tons

Total calendar year 2014 global rice trade is forecast at a record 41.0 million tons, up 0.5 million tons from the previous forecast and 2.3 million tons above 2013. Global trade in 2014 is mainly driven by record purchases by China and West Africa and abundant exportable supplies in Asia. India is projected to again be the largest rice exporter, with Burma, Cambodia, Thailand, and Vietnam expected to increase exports.

There was only one major upward revision in exports this month. Burma’s 2014 export forecast was raised 550,000 tons to 1.3 million tons based on much larger supplies and upward revisions in export levels for previous years. Burma’s exports are up 140,000 tons from a year earlier and are the second largest in nearly 50 years. Peru’s 2014 export forecast was raised 10,000 tons to 70,000 tons based on larger supplies. In contrast, Australia’s 2014 export forecast was lowered 20,000 tons to 500,000 based on smaller supplies.

There were only minor country-specific import revisions this month. The largest was a 50,000-ton decrease in Peru’s imports to 220,000 tons based on a larger crop and weaker 2013 imports. In addition, Australia’s 2014 import forecast was raised 10,000 tons to 150,000 tons based on tighter supplies.

Global trade for 2013 is estimated at 38.7 million tons, up 0.35 million tons from last month’s forecast but still 3 percent below a year earlier. The largest export revision was a 0.4-million ton increase in Burma’s exports to 1.16 million tons based on a reevaluation of Burma’s trade estimates from 2010-2013 by the U.S. Agricultural Office in Bangkok. In contrast, Australia’s 2013 exports were lowered 40,000 tons to 460,000 tons based on year-end trade data. Argentina’s 2013 imports were lowered 24,000 tons to 526,000 tons, also based on year-end trade data.

There were three 2013 import revisions this month. First, Iran’s 2013 imports were raised 250,000 tons to 2.15 million tons based on year-end trade data. Iran’s imports in 2013 were up 0.6 million tons from a year earlier and the largest on record. In contrast, Iraq’s 2013 import estimate was lowered 100,000 tons to 1.3 million tons, also based on year-end trade data. Finally, Peru’s 2013 imports were lowered 24,000 tons to 176,000 tons based on year-end trade data. 

California’s Medium-Grain Milled-Rice Prices Continue To Increase

Prices for California milled rice for the U.S. market and global market continue to rise, mostly over concerns of substantially reduced acreage this year resulting from a record drought in the State.

California’s package-quality medium-grain rice (bulk) for domestic sales to processors and repackagers is quoted at $915 per ton for the week ending March 4, up $143 from February 4 and the highest since August 2009. Export prices (sacked, port of Oakland) for California milled rice were quoted at $1,125 per ton for the week ending March 4, unchanged from mid-February but up $175 from late January. These are the most rapid price increases for U.S. rice since the 2008 price spike.

U.S. prices for long-grain milled rice have increased slightly since early February. For the week ending March 4, 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 $584 per ton, up $5 from both a week and a month earlier. The U.S. price difference (adjusted to reflect a free-on-board vessel location) over Thailand’s 100-percent grade B is $172 per ton, down from a record $191 in early January but well above the long-term average of around $50 per ton.

Prices for U.S. long-grain rough-rice (bulk, fob vessel, New Orleans) remain quoted at $380 per ton for the week ending February 4, unchanged since late September. Prices for higher grades of Thailand’s regular-milled white rice are nearly unchanged from a month earlier, after rising a few dollars a ton in late February and early March due to a stronger baht. The start of the 2013/14 dry season harvest and recent sales of Government- stored rice are preventing any price strength for Thailand’s rice. Prices for medium- and lower-quality grades of milled-rice shipments (excluding shipments that are 100-percent brokens) are up 5-6 percent from a month earlier. Prices for aromatic rice have decreased over the past month, while parboiled prices have declined almost 2 percent.

Prices for Thailand's high-quality, 100-percent Grade B (fob vessel, Bangkok) milled rice for export were quoted at $421 per ton for the week ending March 10, down $1 from the week ending February 10. Prices for Thailand’s 5-percent brokens were quoted at $406 per ton for the week ending March 10, up $1 from the week ending February 10. Prices for Thailand's 5-percent parboiled rice were quoted at $440 per ton for the week ending March 10, down $4 from the week ending February 10. Prices for Thailand’s brokens are up nearly 2 percent. For the week ending March 10, prices for Thailand’s A-1 Super 100-percent brokens were quoted at $315 per ton, up $5 from the week ending February 10. In contrast, price quotes for Thailand’s premium jasmine rice, an aromatic variety, were quoted at $974 per ton for the week ending March 10, down $15 from the week ending February 10 and down $160 from early August. All price quotes for Thailand’s rice are from the Weekly Rice Price Update, reported by the USDA Office in Bangkok.

Price quotes from Vietnam have increased slightly over the past month. For the week ending March 5, prices for Vietnam’s 5-percent double-water-polished with 5-percent brokens were quoted at $400 per ton, up $5 from February 5. Thailand’s price quotes for 5-percent brokens are currently just $6 per ton above quotes for Vietnam’s 5-percent double-water-polished milled rice, down from $10 last month. Thailand’s prices typically exceed prices for similar grades of rice from Vietnam by around $50 per ton. 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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