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USDA Rice Outlook


10 February 2012

USDA Rice Outlook - February 2012USDA Rice Outlook - February 2012

The total 2011/12 U.S. rice supply remains forecast at 252.5 million cwt, 15 percent below the year-earlier record. The U.S. rice crop remains estimated at 185.0 million cwt, down 24 percent from the year-earlier record.
USDA Rice Outlook

U.S. 2011/12 Export Forecast Lowered to 89.0 Million Cwt

There were no U.S. supply-side revisions this month. The total 2011/12 U.S. rice supply remains forecast at 252.5 million cwt, 15 percent below the year-earlier record. The U.S. rice crop remains estimated at 185.0 million cwt, down 24 percent from the year-earlier record. Beginning stocks of all-rice remain calculated at 48.5 million cwt, 33 percent larger than a year earlier. Total U.S. rice imports for 2011/12 remain forecast at 19.0 million cwt, almost 4 percent above a year earlier. The U.S. 2011/12 average milling rate was lowered to 70.00 percent from a preliminary 70.75 percent based on August-December milling data provided by the Rice Millers Association.

The only revision on the use side this month was a 1.0-million cwt reduction in the export forecast to 89.0 million cwt. Long-grain rough-rice accounted for all of the downward revision. Total domestic and residual use of all-rice remains projected at 124.0 million cwt, down 10 percent from the year-earlier record. The smaller export forecast resulted in a 1.0-million cwt increase in the 2011/12 ending stocks forecast to 39.5 million cwt, still down 19 percent from a year earlier.

The 2011/12 season-average farm price (SAFP) for U.S. long-grain rice was lowered 10 cents on the low end and 50 cents on the high end to $13.40-$14.00 per cwt, still above $11.00 in 2010/11. The combined medium- and short-grain 2011/12 U.S. SAFP is projected at $15.20-$15.80 per cwt. Although the range was narrowed, the midpoint is unchanged from last month, but is well below the 2010/11 SAFP of $18.80 per cwt.

The 2011/12 global rice production forecast was raised 1.3 million tons this month to 462.7 million tons (milled basis), the largest crop on record. Production forecasts were raised for India and the Philippines but lowered for Brazil and the United States. Global disappearance for 2011/12 is projected at 459.9 million tons, fractionally above last month’s forecast and the highest on record. Global ending stocks for 2011/12 are projected at 100.1 million tons, virtually unchanged from last month’s forecast but 3 percent larger than a year earlier and the fifth consecutive year of increasing stocks.

The global calendar year 2012 trade forecast was raised 0.9 million tons (milled basis) to 32.8 million tons. India accounts for the bulk of this month’s upward revision in global exports, while export forecasts were lowered for Thailand, Vietnam, and the United States. Import forecasts for 2012 were raised for Egypt and Brazil. The 2011 global trade estimate was raised 0.3 million tons to 35.1 million, the highest on record and more than 10 percent above a year earlier. India accounted for most of the upward revision in 2011 exports.

Trading prices for Thailand’s high- and medium-quality grades of non-specialty rice have declined since early January, mostly due to a lack of inquiries. Price quotes from Vietnam fell slightly over the past month as well, mostly a response to lower priced rice from India and Pakistan. U.S. long-grain milled-rice prices are unchanged from a month earlier, although prices had risen in mid-January before declining again. Prices for California medium-grain milled-rice for the domestic market have remained unchanged over the past month, while quotes for the export market have declined.

DOMESTIC OUTLOOK

Total U.S. Rice Supplies in 2011/12 Projected To Decline 15 Percent

There were no U.S. supply-side revisions this month. The total 2011/12 U.S. rice supply remains forecast at 252.5 million cwt, 15 percent below the year-earlier record. In 2011/12, a much smaller crop has more than offset a larger carryin and higher expected imports. By class, long-grain total supplies are forecast at 168.6 million cwt, 24 percent below a year earlier and the smallest since 2000/01. In contrast, combined medium- and short-grain total supplies are forecast at 81.2 million cwt, 11 percent larger than a year earlier and the highest since 1983/84. Supplies of broken rice kernels are not specified by class.

The 2011/12 U.S. rice crop remains estimated at 185.0 million cwt, down 24 percent from the year-earlier record and the smallest since 1998/99. Production declined in 2011/12 in all reported States except California. By class, long-grain production is estimated at 116.4 million, a 37-percent decline from a year earlier and the smallest U.S. long-grain crop since 1996/97. Virtually all U.S. long-grain rice is grown in the South. Combined medium- and short-grain production is estimated at 68.6 million cwt, 15 percent higher than a year earlier and the largest on record.

The smaller U.S. crop was the result of a 26-percent drop in planted area to 2.69 million acres, the smallest since 1987/88. The area decline, which was for long-grain only, was primarily caused by higher returns for alternative crops and weather problems— especially in the Delta—early in the season. Area declined in all reported States except California. In contrast, the average U.S. field yield of 7,067 pounds per acre was 342 pounds above a year earlier and third highest on record. Yields were higher in 2011/12 than a year earlier in all reported States except Mississippi, where yields were unchanged.

Beginning stocks of all-rice remain estimated at 48.5 million cwt, 33 percent larger than a year earlier and the largest since 1987/88. The 2011/12 long-grain carryin remains estimated at 35.6 million cwt, 55 percent larger than a year earlier. In contrast, the medium/short-grain carryin is calculated at 10.1 million cwt, 16 percent below a year earlier. Beginning stocks of brokens are calculated at 2.7 million cwt, a 91-percent increase from a year earlier.

Total U.S. rice imports for 2011/12 remain forecast at 19.0 million cwt, almost 4 percent above a year earlier, but well below the 2007/08 record of 23.9 million cwt. Long-grain imports remain projected at 16.5 million cwt, up 4 percent from 2010/11. Thailand supplies more than 60 percent of U.S. long-grain imports, with its premium jasmine rice accounting for nearly all of its shipments to the United States. India is the second largest U.S. supplier, accounting for 15 percent of U.S. long-grain rice imports. Through November, Brazil has shipped more has 21,000 tons of long-grain rice to the U.S., making it the third largest supplier of long-grain rice imports to the U.S. Brazil is not a typical supplier of rice to the United States. Pakistan supplies most of most of the remaining U.S. long-grain rice imports. Pakistan and India ship almost exclusively basmati rice to the U.S., while Brazil mostly ships regular-milled rice.

U.S. medium- and short-grain imports remain projected at 2.5 million cwt, virtually unchanged from 2010/11. Specialty rice from Thailand classified by the U.S. Census Bureau as medium- and short-grain rice accounts for the bulk of U.S. medium- and short-grain imports. Italy ships small amounts of Arborio rice to the U.S. as well.

This month, the U.S. 2011/12 average milling rate was lowered to 70.00 percent from a preliminary 70.75 percent based on August-December milling data reported by the Rice Millers Association. The lower milling rate implies more rough-rice is needed to produce a given quantity of milled rice for export or domestic markets. This is the first objective estimate of the 2011/12 average milling rate based on actual milling data.

U.S. 2011/12 Export Forecast Lowered to 89.0 Million Cwt

Total use of U.S. rice in 2011/12 is projected at 213.0 million cwt, down 1.0 million cwt from last month’s forecast and 15 percent below the year-earlier record. By class, longgrain total use is projected at 147.0 million cwt, 1.0 million cwt below last month and 21 percent smaller than the year-earlier record. In contrast, medium/short-grain total use remains forecast at a near-record 66.0 million cwt, 5 percent above a year earlier.

Total domestic and residual use of all-rice in 2011/12 remains projected at 124.0 million cwt, down 10 percent from the year-earlier record. Much of the year-to-year decline in domestic and residual use is based on expectations of smaller losses in processing, handling, and transporting associated with a smaller crop. By class, long-grain domestic disappearance is projected at 89.0 million cwt, an 18-percent drop from the year-earlier record. Combined medium- and short-grain domestic disappearance remains projected at 35.0 million cwt, an increase of 19 percent from 2010/11.

Total exports of U.S. rice in 2011/12 are projected at 89.0 million cwt, down 1.0 million cwt from last month’s forecast and 26 percent below 2010/11. The downward revision was largely based on a slower than expected pace of shipments, mostly to Central America. Long-grain accounted for all of this month’s downward revision in exports.

U.S. long-grain exports are projected at 58.0 million cwt, 1.0 million cwt below last month’s forecast and 26 percent below a year earlier. These are the smallest U.S. longgrain exports since 1996/97. Sub-Saharan Africa, the Middle East, Central America, and South America account for most of the expected decline in U.S. long-grain exports in 2011/12. The year-to-year decline is mostly a result of greater competition from other suppliers and, in some import markets, larger domestic crops.

Combined medium- and short-grain exports remain projected at 31.0 million cwt, 8 percent below a year earlier. The United States is facing much stronger competition from both Australia and Egypt in the Pacific and Middle East than it did a year earlier.

By type, U.S. rough-rice exports are projected at 32.0 million cwt, down 1.0 million cwt from last month and 8 percent below a year earlier, with Central and South America accounting for most of the year-to-year decline. Mexico and Central America are the largest markets for U.S. rough-rice exports, taking long-grain from the South almost exclusively. South America is an occasional buyer of U.S. rough-rice when regional supplies are low. Through December, U.S. shipments and sales to Mexico have been well ahead of a year earlier, while purchases by Central America are well behind a year earlier. U.S. sales to South America have been quite small thus far in 2011/12.

U.S. milled-rice exports (combined milled and brown rice exports on a rough basis) remain projected at 57.0 million cwt, 26 percent smaller than a year earlier and the smallest U.S. milled-rice exports since 1975/76. Africa and the Middle East account for the bulk of the expected decline in U.S. milled-rice exports in 2011/12, mostly due to greater competition from lower-priced suppliers.

U.S. ending stocks of all-rice in 2011/12 are projected at 39.5 million cwt, up 1.0 million cwt from last month’s forecast but 19 percent below a year earlier. The stocks-to-use ratio is calculated at 18.5 percent, down from 19.4 percent in 2010/11. By class, the 2011/12 U.S. long-grain carryout is projected at 21.6 million cwt, up 1.0 million cwt from last month’s calculation, but 40 percent below a year earlier. The long-grain stocks-touse ratio is calculated at 14.7 percent, down from 19.1 percent in 2010/11.

The medium/short-grain carryout is projected at 15.2 million cwt, up 50 percent from a year earlier and the largest medium- and short-grain carryout since 2000/01. Ending stocks of this size are expected to pressure U.S. medium- and short-grain prices downward the remainder of the year. The year-to-year increase is primarily due to much larger U.S. supplies and only a modest expansion in use. The medium/short-grain stocks-to-use ratio is calculated at 23.1 percent, up substantially from 16.1 percent in 2010/11.

U.S. Season-Average Price Forecast for Long-Grain Rice Lowered to $13.40-$14.00 Cwt

The 2011/12 season-average farm price (SAFP) for U.S. long-grain rice is projected at $13.40-$14.00 per cwt, down 10 cents on the low-end and 50 cents on the high-end from last month’s forecast. The downward revision is based on NASS prices through December and on expectations regarding rough-rice prices the remainder of the market year. Despite this month’s downward revision, the long-grain SAFP remains above the revised estimate of $11.00 for 2010/11. U.S. long-grain prices in 2011/12 are being supported by much smaller U.S. supplies.

The combined medium- and short-grain 2011/12 U.S. SAFP is projected at $15.20- $15.80 per cwt, up 20 cents on the low end and down 20 cents on the high end from last month’s forecast. The midpoint of $15.50 is unchanged from last month, but is $3.30 below the revised 2010/11 SAFP of $18.80 per cwt. In 2011/12, U.S. mediumand short-grain prices are facing pressure from much larger U.S. supplies and increased competition from Australia and Egypt in the global rice market.

In late January, NASS reported a mid-January U.S. long-grain rough-rice price of $14.00 per cwt, up 20 cents from a revised December estimate. The December price was lowered 60 cents from the mid-month estimate to $13.80. For combined medium and short-grain rice, the mid-January NASS price was reported at $15.30 per cwt, up 10 cents from the revised December price. The December medium- and short-grain rough-rice cash price was lowered $1.70 from the mid-month estimate to $15.20 per cwt. The full-month medium- and short-grain rough-rice price has declined every month since August, with the December price the lowest since July 2008.

INTERNATIONAL RICE MARKET

Production Forecasts for 2011/12 Raised for India and the Philippines

The 2011/12 global rice production forecast was raised 1.3 million tons this month to 462.7 million tons (milled basis). The crop is almost 3 percent above a year earlier and the highest on record. Australia, Bangladesh, China, Egypt, India, Indonesia, and Pakistan account for most of the projected global production increase in 2011/12. In contrast, production is substantially lower in 2011/12 than a year earlier in Brazil and the United States.

The bumper global crop is largely the result of expanded area. At 160.2 million hectares, global harvested area in 2011/12 is the highest on record, with South Asia accounting for most of the projected increase. The average yield of 4.33 tons per hectare (rough-basis) is fractionally above a year earlier and the highest on record.

The largest production increase this month was made for India, with the production estimate raised 2.0 million tons to a record 102.0 million tons, with both the area and yield forecasts raised. The U.S. Agricultural Counselor in New Delhi reported that favorable 2011 monsoon rains combined with overall good weather conditions in the major rice producing areas resulted in expanded kharif rice acreage and a record kharif crop. The much smaller dry-season rabi crop has not yet been harvested.

The Philippines 2011/12 production forecast was raised 140,000 tons to 10.64 million based on recently released Government data projecting production to increase significantly in the first quarter of this year. The upward revision was the result of a higher yield forecast; total area was lowered slightly. The total crop is projected up 1 percent from a year earlier. The Government of the Philippines is trying to reduce the country’s dependency on imports by increasing production.

These two upward revisions were partially offset by several downward revisions. First, Egypt’s 2011/12 production estimate was lowered 400,000 tons to 4.3 million tons based on information from U.S. agricultural counselor in Cairo indicating smaller area and a weaker yield. Despite this month’s downward revision, the crop is 39 percent above a year earlier and a near-record. The bumper crop was the result of a record harvested area of 730,000 hectares. Second, Brazil’s 2011/12 crop was lowered 340,000 tons to 7.82 million tons due to severe drought in the major growing State of Rio Grande du Sol. The downward revision was the result of a lower yield. Brazil’s 2011/12 production is projected to be 16 percent smaller than a year earlier, with both area and yield much lower.

There were two smaller production revisions this month. Argentina’s 2011/12 crop was lowered 39,000 tons to 975,000 based on information from the U.S. Agricultural Counselor in Buenos Aires that dry conditions were reducing the effectiveness of irrigation. Both area and yield estimates for Argentina were lowered this month. Finally, the U.S. 2011/12 crop estimate on a milled basis was lowered 63,000 tons to 5.874 million due solely to a lower milling yield. The rough-rice crop estimate is unchanged. The U.S. crop is down 23 percent from a year earlier due to much smaller area.

The 2010/11 global production estimate was raised 0.7 million tons to 451.2 million tons, up 2 percent from a year earlier. India accounted for most of the upward revision in production. India’s 2010/11 crop estimate was raised 0.7 million tons to 96.0 million tons based on final government data reporting a higher yield. In addition, Brazil’s 2010/11 crop estimate was raised 43,000 tones to a record 9.3 million tons based on slightly higher area. In contrast, Argentina’s 2010/11 crop was reduced 18,000 tons to 1.12 million based on government data reporting a lower yield.

Global disappearance for 2011/12 is projected at 459.9 million tons, fractionally above last month’s forecast and the highest on record. Thailand and Vietnam account for most of this month’s upward revision in the global. Global disappearance is 2.6 percent larger than a year earlier, with India accounting for the largest share of the year-to-year increase in global disappearance. Disappearance is also projected to be higher in 2011/12 in Bangladesh, China, Thailand, and Vietnam; but is projected to decline in Brazil, the Philippines, and the United States. In addition to consumption, disappearance for any country includes unreported losses in processing, transporting, and marketing.

Global ending stocks for 2011/12 are projected at 100.1 million tons, virtually unchanged from last month’s forecast, but 3 percent larger than a year earlier. Ending stocks forecasts for the Philippines and the United States were raised slightly this month. China, India, and Thailand account for most of the year-to-year increase in global ending stocks. In contrast, ending stocks are projected to decline in 2011/12 in Brazil, Indonesia, the Philippines, and the United States. This is the fifth consecutive annual increase in global ending stocks, with ending stocks the highest since 2002/03. The global stocks-to-use ratio for 2011/12 is calculated at 21.8 percent, virtually unchanged from 2010/11.

Global Trade Forecast for 2012 Raised 3 Percent to 32.8 Million Tons

The global calendar year 2012 trade forecast was raised 0.9 million tons (milled basis) from last month’s forecast to 32.8 million tons. Despite the upward revision, global trade is still almost 7 percent below the 2011 revised record of 35.1 million tons. The weaker global trade this year is due to weaker demand for imports from several top buyers, particularly Bangladesh and Indonesia.

India accounts for the bulk of this month’s upward revision in 2012 global exports. At 6.0 million tons, India’s 2012 exports are 1.5 million tons above last month’s forecast and 1.8 million above a year earlier. These are the highest exports for India since 2007, prior to the implementation of a ban on India’s non-basmati exports in early 2008. The substantial upward revision was based on highly competitive prices of India’s rice and expected continuation of the policy allowing exports of non-basmati rice due to adequate domestic supplies. Africa and the Middle East are expected to account for much of the increase in India’s exports in 2012.

In addition, Brazil’s 2012 export forecast was raised 75,000 tons to 725,000 tons based on a recommendation from the U.S. Agricultural Counselor in Brazil. Despite this month’s upward revision, Brazil’s exports are well below the 2011 record of 1.3 million tons, with the expected decline largely based on smaller supplies.

These two upward revisions in 2012 exports were partially offset by several downward revisions. First, Thailand’s export forecast was lowered 500,000 tons to 6.5 million based on uncompetitive prices and a slow pace of sales thus far in 2012. These are the lowest calendar year exports for Thailand since 1998. Second, Vietnam’s 2012 export forecast was lowered 200,000 tons to 6.5 million based on expected strong competition from lower priced rice from India and Pakistan.

Third, Egypt’s 2012 export forecast was raised 100,000 tons to 600,000 tons, four times the level shipped in 2011 and the highest since 2008. The U.S. Agricultural Counselor in Cairo has reported that while the ban on rice exports is still in place, the lack of enforcement and minimal penalties have resulted in massive contraband trade. Africa and the Middle East are the primary destinations of Egypt’s rice. Fourth, the U.S. 2012 export forecast was lowered 50,000 tons to 3.0 million based on a recent slowing of sales and strong competition from other suppliers. Argentina’s 2012 export forecast was lowered 20,000 tons to 630,000 based on smaller supplies and a slower pace of sales.

On the import side, Egypt’s 2012 import forecast was raised 480,000 tons to 500,000 based on recommendation from the U.S. Agricultural Counselor in Cairo. This is the largest amount of rice imported by Egypt on record. In addition, Brazil’s 2012 import forecast was raised 50,000 tons to 600,000 tons based on smaller supplies.

The 2011 global trade estimate was raised 0.3 million tons to 35.1 million, the highest on record and more than 10 percent above a year earlier. Substantial increases in exports from India, Thailand, and Vietnam drove global exports to a record high in 2011. Among importers, increased purchase by Bangladesh, Indonesia, Mexico, and Nigeria accounted for most of the robust increase in global imports in 2011.

India accounted for most of this month’s upward revision in 2011 global exports. India’s 2011 export estimate was raised 400,000 tons to 4.2 million based in part on information from the U.S. Agricultural Counselor in New Delhi. India’s rice is competitively priced and has been moving at a rapid pace, mostly to Sub-Saharan Africa and Southeast Asia. Argentina’s 2011 export estimate was raised 45,000 tons to a record 675,000 tons based on yearend data. These upward revisions were partially offset by a 135,000-ton reduction in Uruguay’s 2011 export forecast to 840,000 tons based on yearend trade data.

Several 2011 import revisions were made this month as well. First, South Korea’s 2011 imports—all purchased at part of its annual WTO commitments—were raised 110,000 tons to 480,000 tons based on year-end shipment data. Brazil’s 2011 import estimate was raised 80,000 tons to 620,000 based on shipment data. In contrast, Jordan’s 2011 import estimate was lowered 20,000 tons to 140,000 tons, also based on year-end shipment data.

Global Rice Trading Prices Continue To Fall

Trading prices for Thailand’s high- and medium-quality grades of non-specialty rice have declined since early January, mostly due to a lack of inquiries. Prices for Thailand's high-quality, 100-percent Grade B (fob vessel, Bangkok) milled rice for export were quoted at $549 per ton for the week ending February 9, down $13 from the week ending January 9 and the lowest since January 2008. Prices for Thailand’s 5-percent brokens were quoted at $533 per ton for the week ending February 6, down $15 from the week ending January 9. Prices for Thailand's 5-percent parboiled rice—a specialty rice—were quoted at $545 per ton for the week ending February 6, unchanged from the week ending January 9.

Prices for brokens actually increased. For the week ending February 6, prices for Thailand’s A-1 Super 100-percent brokens were quoted at $517 per ton, up $2 from the week ending January 9. Price quotes for Thailand’s premium jasmine rice were quoted at $1,036 per ton for the week ending February 6, down $12 from January 9. All price quotes for Thailand’s rice are from the Weekly Rice Price Update, reported by the U.S. agricultural counselor in Bangkok.

Price quotes from Vietnam fell slightly over the past month as well, mostly a response to lower priced rice from India and Pakistan. For the week ending February 7, prices for Vietnam’s 5-percent double-water polished with 5-percent brokens were quoted at $440 per ton—down $5 per ton from the week ending January 10. Thailand’s price quotes for 5 percent brokens are currently $93 per ton above quotes for Vietnam’s 5-percent double-water polished milled rice, compared with a difference of $103 last month.

U.S. long-grain milled-rice prices are unchanged from a month earlier. Prices had risen in mid-January, but began declining again late in the month. For the week ending February 7, prices for high-quality Southern long-grain rice (No. 2, 4-percent brokens, bagged, free alongside a vessel, U.S. Gulf port) were quoted at $518 per ton, unchanged from January 10, but down $11 from mid-January. U.S. long-grain rice faces strong price competition in the global market and the U.S. has made few recent sales. Thai rice is now trading at a premium of $6 compared with U.S. rice (adjusted to reflect the fob vessel price). Last month, Thailand’s rice was quoted with a premium of $29 over similar grades of U.S. rice. Thailand is currently making few sales. U.S. long-grain rough-rice (bulk, fob vessel, New Orleans) was quoted at $325 per ton for the week ending January 10, unchanged from a month earlier.

Prices for California rice for the domestic market have remained unchanged over the past month. California’s package-quality medium-grain rice (sacked) for domestic sales remains quoted at $816 per ton for the week ending February 7, unchanged from January 10. In contrast, export price quotes (for 30-kg bags, fob vessel) were quoted at $675 per ton for the week ending February 7, down $50 from a month earlier. Both Australia and Egypt are providing more competition to the U.S. in several medium- and short-grain markets. 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.

February 2012

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