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USDA Rice Outlook


14 August 2013

USDA Rice Outlook - August 2013USDA Rice Outlook - August 2013


USDA Rice Outlook

Domestic Outlook

U.S. 2013/14 Rice Production Forecast Raised to 181.4 Million Cwt

The 2013/14 U.S. rice crop is projected at 181.4 million cwt, up 1 percent from last month’s forecast, but 9 percent below a year earlier and the smallest since 1996/97. By class, the U.S. 2013/14 long-grain is projected at 124.8 million cwt, just 0.8 million cwt above last month’s forecast but 13.5 percent below a year earlier. Combined medium- and short-grain production is projected at 56.6 million cwt, up 2 percent from both last month’s forecast and a year earlier.

The upward revision in U.S. rice production is based on a higher yield forecast. At 7,406 pounds per acre, the 2013/14 all rice average yield is 76 pounds higher than last month’s forecast but still 43 pounds below the year-earlier record. This is the first survey-based yield estimate of the 2013/14 U.S. rice crop.

Planted area remains estimated at 2.47 million acres, 8.5 percent below a year earlier and the smallest U.S. rice plantings since 1987/88. The decline was largely due to higher expected returns from alternative crops—such as corn and soybeans in the Delta—and to weather problems in many parts of the South and water restrictions in Texas. Rice plantings are estimated to be lower than a year earlier in all reported States in 2013/14 except Mississippi, with Arkansas accounting for the largest share of the decline.

Yields in 2013/14 are projected higher than last year in Texas, Louisiana, and California. Texas reported the largest yield increase—8,700 pounds per acre—330 pounds above a year earlier and the highest on record. Louisiana’s 2013/14 yield is estimated at 6,700 pounds per acre, up 270 pounds from a year earlier and also the highest on record. At 8,300 pounds per acre, California’s 2013/14 yield is 190 pounds higher than a year earlier, but below the record 8,600 pounds achieved in 2004/05 and 2009/10. Weather in California has generally been favorable for rice production this year.

Missouri’s 2013/14 average yield of 6,990 pounds is unchanged from last year’s record. At 6,800 pounds per acre, Mississippi’s 2013/14 average yield is 400 pounds below a year earlier and the weakest since 2009/10. Arkansas’ 2012/13 yield is estimated at 7,200 pounds per acre, a decline of 270 pounds from last year. The Delta experienced an abnormally wet and cool spring this year that delayed plantings by several weeks.

Arkansas and Missouri account for all of the projected decline in U.S. rice production in 2013/14. At 76.0 million cwt, Arkansas’ 2013/14 rice crop is projected to be 21 percent smaller than a year earlier and the smallest since 1996/97. The smaller crop is the result of an 18-percent area decline and a weaker yield. Missouri’s 2013/14 rice production is projected at 11.25 million cwt, down 9 percent from a year earlier, a result of smaller area.

In contrast, Mississippi’s 2013/14 rice crop is projected at 10.8 million cwt, an increase of 16 percent from last year, a result of expanded area. Louisiana’s 2013/14 production of 26.5 million cwt is nearly 4 percent larger than last year. California’s 2013/14 rice production is projected at 45.65 million cwt, up more than 1 percent from a year earlier, a result of a slightly higher yield. The Texas rice crop of 11.2 million cwt is virtually unchanged from a year earlier, with a record yield offset by smaller plantings.

Crop Progress in the Delta Remains Behind the Normal Pace

For the week ending August 11, 70 percent of the U.S. 2013/14 rice crop was reported headed, well behind 83 percent reported last year but slightly ahead of the U.S. 5-year average of 68 percent. Despite improved weather, crop progress remains behind normal in all three Delta States. In Arkansas, 64 percent of the 2013/14 rice crop was reported planted by August 11, behind the State’s 5-year average of 72 percent. In Mississippi, 61 percent of the 2013/14 rice crop was reported headed by August 11, well behind the State’s 5-year average of 87 percent. Progress remains 2 percentage points behind normal in Missouri, with 52 percent reported headed by August 11.

On the Gulf Coast, 95 percent of Louisiana’s 2013/14 crop was reported headed by August 11, just 1 percentage point behind the State’s 5-year average. Almost all of the Texas crop was reported headed by August 11, slightly ahead of the State’s 5- year average of 95 percent. In contrast to the South, 65 percent of the California crop was reported headed by August 11, nearly double the State’s 5-year average of 34 percent.

Harvest typically begins on the Gulf Coast in late July, with harvest reporting by NASS beginning the first week of August. However, through August 11, NASS has not reported any harvesting of the 2013/14 U.S. rice crop. Recently, some local media sources have reported small amounts of harvesting on the Gulf Coast. Typically, around 15 percent of the Texas and Louisiana crops are harvested by the end of the first week of August.

U.S. 2013/14 Rice Supplies Are Projected To Decline 9 percent

Total U.S. rice supplies in 2013/14 are projected at 238.4 million cwt, 1 percent above last month’s forecast but 9 percent smaller than a year earlier. These are the smallest U.S. supplies since 2000/01. The tighter supplies are the result of a weaker crop and smaller carryin more than offsetting higher imports. Long-grain total supplies are forecast at 165.2 million cwt, fractionally above last month’s forecast but 12 percent below a year earlier. Combined medium- and short-grain total supplies are forecast at 71.1 million cwt, up 4 percent from last month’s forecast but still 2 percent below a year earlier. These are the smallest medium- and short-grain supplies since 2008/09.

At 34.6 million cwt, the 2013/14 carryin is 2.0 million cwt above last month’s forecast and 16 percent smaller than a year earlier. The upward revision in the 2013/14 carryin was caused by a reduction in the 2012/13 export forecast. The 2013/14 long-grain carryin is forecast at 20.4 million cwt, up 0.5 million cwt from last month’s forecast but 16 percent below a year earlier. Combined medium- and short-grain carryin is forecast at 12.0 million cwt, 1.5 million cwt above last month’s forecast, but still 18 percent below a year earlier.

Imports of all rice in 2013/14 are forecast at 22.5 million cwt, down 1.0 million cwt from last month’s forecast, but up 7 percent from a year earlier and the second highest on record. The downward revision was mainly based on a larger U.S. crop. Long-grain imports are projected at a record 20.0 million cwt, down 1.0 million from last month’s forecast but 8 percent higher than a year earlier. Thailand, India, and Pakistan typically supply the bulk of U.S. long-grain rice imports. In years of tight supplies of U.S. rice, Vietnam will often ship brokens to the U.S. for processed uses. Combined medium- and short-grain imports remain projected at 2.5 million cwt, unchanged from a year earlier. Specialty rice from Thailand accounts for the bulk of U.S. rice imports of medium- and short-grain rice. Arborio rice from Italy accounts for much of the remainder of U.S. imports of medium- and short-grain rice.

U.S. 2013/14 Export Forecast Raised to 96.0 Million Cwt

Total use of U.S. rice in 2013/14 is projected at 208.0 million cwt, up 1.0 million cwt from last month’s forecast but still more than 8 percent below a year earlier. Exports account for all of this month’s upward revision in 2013/14 total use. Longgrain total use remains projected at 147.0 million cwt, 12 percent below a year earlier. Combined medium- and short-grain use is projected at 61.0 million cwt, up 1.0 million cwt from last month’s forecast and almost 1 percent above a year earlier.

Total domestic and residual use of all rice in 2013/14 remains projected at 112.0 million cwt, almost 7 percent smaller than a year earlier. Long-grain domestic and residual use remains projected at 81.0 million cwt, 10 percent below a year earlier. Combined medium- and short-grain domestic and residual use remains projected at 31.0 million cwt, up 1.0 million cwt from a year earlier.

Total exports in 2013/14 are projected at 96.0 million cwt, up 1.0 million cwt from last month’s forecast but 10 percent below a year earlier. The upward revision was primarily based on larger U.S. supplies and a lower U.S. long-grain rough-rice price forecast. Long-grain exports remain projected at 66.0 million cwt, 14 percent below a year earlier. The U.S. is likely to lose market share in the Middle East and Sub-Saharan Africa to lower priced Asian suppliers in 2013/14. Combined medium- and short-grain exports are projected at 30.0 million cwt, up 1.0 million cwt from last month’s forecast but almost 2 percent below a year earlier. The United States is expected to face greater competition in Oceania, the Middle East, and North Africa from Australia and Egypt in 2013/14.

By type, rough-rice exports remain projected at 35.0 million cwt, up 0.5 million cwt from the year-earlier revised forecast. Latin America is expected to remain the top market for U.S. rough-rice exports, with Southern long-grain accounting for nearly all of the U.S. rough-rice shipments to the region. Combined milled- and brownrice exports (on a rough basis) are projected at 61.0 million cwt, up 1.0 million cwt from last month’s forecast but 16 percent below a year earlier. The Middle East and Sub-Saharan Africa are expected to account for the bulk of the decline in U.S. milled-rice exports in 2013/14.

U.S. ending stocks of all rice in 2013/14 are projected at 30.4 million cwt, up almost 7 percent from last month’s forecast but 12 percent below a year earlier.

These are the lowest U.S. ending stocks since 2007/08. The stocks-to-use ratio is calculated at 14.6 percent, down slightly from 15.2 percent in 2012/13.

By class, the 2013/14 U.S. long-grain carryout is projected at 18.2 million cwt, up slightly from last month’s forecast but 11 percent smaller than a year earlier. The long-grain stocks-to-use ratio is calculated at 12.4 percent, up slightly from a revised 12.3 percent a year earlier. The medium- and short-grain carryout is projected at 10.1 million cwt, up 19 percent from last month’s forecast but 16 percent below a year earlier. The medium/short-grain stocks-to-use ratio is calculated at 16.6 percent, down from 19.8 percent in 2012/13 and the lowest since 2008/09.

There were several revisions to the 2012/13 U.S. rice balance sheet on the use side this month. First, total exports were lowered 2.0 million cwt to 107.0 million cwt. The downward revision was based on Census data through June and information from the U.S. Export Sales report through the end of July. Latin America and Northeast Asia account for most of this month’s downward revision in 2012/13 U.S. rice exports. By class, long-grain exports were lowered 0.5 million cwt to 76.5 million cwt. Combined medium- and short-grain 2012/13 exports were lowered 1.5 million cwt to 30.5. Ending stocks of all rice, long-grain, and combined mediumand short-grain rice were raised to reflect the weaker export forecast.

There were slight revisions to the 2010/11 and 2011/12 supply and use tables this month reflecting Census correction of U.S. trade data in late July for 2010, 2011, and 2012 by class, type, month, and market. All market-year trade revisions were offset by changes in total domestic and residual use.

U.S. 2013/14 Season-Average Farm Price Forecast Lowered for Long- Grain Rice

The 2013/14 season-average farm price (SAFP) for U.S. long-grain rice is forecast at $14.00-$15.00 per cwt, down 50 cents on both the high and low end from last month’s forecast. This compares with $14.40 per cwt a year earlier. The downward revision was mainly based on larger U.S. supplies and lower global trading prices. On an annual basis, the impact of tighter U.S. supplies is expected to nearly offset the effects of larger exportable supplies in Asia and South America, with little change expected in U.S. long-grain prices in 2013/14.

The combined medium- and short-grain 2013/14 U.S. SAFP remains forecast at $15.80-$16.80 per cwt, compared with a 2012/13 SAFP of $16.20 per cwt. Despite slightly tighter U.S. supplies, greater competition from Egypt and Australia in the global market is expected to limit the amount of any price increase.

In late July, NASS reported a mid-July U.S. long-grain rough-rice price of $15.00 per cwt, unchanged from the revised June estimate. The June and July preliminary prices are the highest since January 2009. The June price was lowered 10 cents to $15.00 per cwt. For combined medium- and short-grain rice, the mid-July NASS price was reported at $16.90 per cwt, up 20 cents from the revised June price. The June price was lowered 50 cents from the midmonth estimate to $16.70 per cwt.

International Outlook

Production Forecasts for 2013/14 Lowered for China and North Korea

Global rice production for 2013/14 is forecast at a record 477.9 million tons (milled basis), down 0.8 million tons from last month’s forecast but up almost 2 percent from a year earlier. The bumper global crop is the result of expanded area. At a record 161.3 million hectares, global rice area in 2013/14 is up almost 3 percent from a year earlier. Burma, China, India, Nigeria, Pakistan, and Thailand 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 4.42 tons per hectare (on a rough-rice basis), is slightly below the 2012/13 record. The yield decline is partly due to area shifts by country.

There were three downward revisions to 2013/14 crop forecasts this month. First, China’s total production was lowered 1.0 million tons to 143.0 million tons because of drought and severe heat in the lower Yangtze River Basin and in the southwest. These areas have experienced record-breaking heat and very little rainfall since early July, with insufficient cooling at night. The drought is forecast to continue until mid-August. Both the late-crop and single-crop in the affected areas have been adversely impacted by the severe heat and lack of soil moisture. In contrast, moisture and temperatures in northeast China have been normal this year. China’s 2013/14 total rice production is projected to be fractionally below a year earlier and will be the first decline since 2003/04. The slight year-to-year production decline is the result of a lower yield; area is the highest since 1999/2000 and in its sixth consecutive year of expansion.

Second, North Korea’s 2013/14 crop forecast was lowered 40,000 tons to 1.7 million tons due to excessive rainfall in July and early August in the northeast, impacting about 36 percent of North Korea’s total rice crop. And third, Mexico’s 2013/14 production forecast was lowered 3,000 tons to 122,000 tons based on smaller area. According to industry sources, rice output is expected to decline due to the lack of specific government supports and strong competition from imported rice, not only from the United States, but also from Uruguay and Pakistan, resulting in less rice planted by Mexican growers. Mexico’s rice production has been in a long-term decline since the late 1990s, mostly a result of reduced government support.

These downward revisions were partially offset by three upward revisions. First, Pakistan’s 2013/14 production forecast was raised 200,000 tons to 6.4 million tons due to a higher yield forecast. The yield was raised because of favorable water levels in reservoirs, improved crop conditions, more use of high yielding varieties, greater irrigation supplies, and more electricity for tube wells. Pakistan’s 2013/14 crop is up 14 percent from the year-earlier flood-reduced crop, but still below the 2008/09 record of 6.9 million tons. The U.S. 2013/14 crop forecast was raised 59,000 tons to 5.78 million tons based on a higher yield. Despite an abnormally cool wet spring in much of the South, the U.S. yield is the second highest on record. Both Pakistan and United States are major exporters. And finally, Turkey’s 2013/14 production forecast was raised 20,000 tons to 490,000 tons based on a higher yield; area was lowered slightly. Weather conditions have been favorable for rice this year. The revisions for Turkey were based on recommendations from the U.S. Agricultural Office in Ankara.

The 2012/13 global rice production estimate was lowered 0.9 million tons to 468.9 million tons, still almost 1 percent larger than a year earlier. Asia accounts for most of this month’s downward revision in the 2012/13 global rice production estimate. There were five country-specific downward revisions. First, Indonesia’s production was lowered 950,000 tons to 36.65 million tons based on information from the U.S. Agricultural Office in Jakarta of above-normal rainfall during the current dry season (second and third growing period). While the excessive rain actually increased rice area in the dry season since it was too wet to produce corn or soybeans, the heavy rains that fell during grain-fill and harvest of the first crop reduced yields. Indonesia has had little success in expanding yield and area in recent years.

Second, Bangladesh’s 2012/13 crop was lowered 200,000 tons to 33.8 million tons based on Government data indicating a slightly lower yield for both the boro and aus crops. Despite the downward revision, Bangladesh’s 2012/13 production was slightly higher than a year earlier. Bangladesh has steadily expanded production for the past two decades, with higher yields accounting for the majority of the production increase. Some of the increase in the average yield has been caused by shifting more area to the high-yielding, irrigated boro crop.

The remaining crop reductions occurred in Latin America. First, Argentina’s 2012/13 crop was lowered 104,000 tons to 910,000 tons based on a weaker yield caused by late rains. Second, Peru’s 2012/13 production was reduced 69,000 tons to 2.0 million tons based on year-end harvest numbers that showed a smaller area estimate caused by insect problems. Finally, Mexico’s 2012/13 production was lowered 3,000 tons to 128,000 tons based on new estimates released from the Government.

Global rice use (including a residual component) for 2013/14 is projected at a record 475.3 million tons, down 0.8 million tons from last month’s forecast but up more than 1 percent from a year earlier. Bangladesh, China, Indonesia, and Vietnam account for most of the downward revision in the 2013/14 global rice domestic disappearance forecast. On an annual basis, Bangladesh, Cambodia, China, 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, North Korea, South Korea, and the United States. Consumption has declined for several decades in both Japan and South Korea due to diet diversification. North Korea faces food deficit problems.

Global ending stocks for 2013/14 are projected at 107.5 million tons, down 0.6 million tons from last month’s forecast but 2.5 percent larger than a year earlier. These are the largest global ending stocks since 2001/02. China and India account for the bulk of this month’s downward revision in global ending stocks. India and Thailand account for most of the year-to-year increase in global ending stocks. At 15.5 million tons, Thailand’s 2013/14 ending stocks are up 24 percent from a year earlier and are the highest on record. The large stocks buildup is the result of the Government’s paddy-pledging program, which is making Thailand’s rice uncompetitive. India’s 2013/14 ending stocks are projected to increase 2 percent to a near-record 24.5 million tons, largely due to a record crop. In contrast, ending stocks are projected to decline in 2013/14 in China, Indonesia, the United States, and Vietnam. The global stocks-to-use ratio for 2013/14 is calculated at 22.6 percent, up slightly from a year earlier.

Export Forecasts for 2014 Raised for India, Pakistan, and Vietnam

Total calendar year 2014 global rice trade is forecast at 38.7 million tons, up 0.7 million tons from last month’s forecast and almost 0.6 million tons above this year. Global trade in 2014 and the rest of 2013 will mainly driven by strong sales to China and Africa.

There were three export revisions for 2014 this month. First, India’s 2014 export forecast was raised 500,000 tons to 9.0 million based on stronger global trade and India’s large supplies. India’s projected 2014 exports are 0.7 million tons below this year, but still large compared with India’s rice-exporting history. Second, Pakistan’s 2014 export forecast was increased 100,000 tons to 3.1 million tons based on larger exportable supplies and new financing terms with Iran. Finally, Vietnam’s 2014 export forecast was raised 100,000 tons to a record 7.8 million tons based on expectations of stronger demand from China, currently the world’s largest importing country.

There were several significant upward revisions in import forecasts for 2014 this month as well. The only upward revision in Asia was a 400,000-ton increase in China’s 2014 import forecast to a record 3.4 million tons. The upward revision was based on the current strong pace of purchases from low-cost Asian suppliers and growing concern over the safety of rice grown in parts of China. There were several upward revisions for importers in Sub-Saharan Africa, all based on expectations of a continuation of this year’s strong—and sometimes record— shipment pace. First, Senegal’s 2014 import forecast was raised 150,000 tons to a near-record 1.15 million tons. Second, Cameroon’s 2014 import forecast was increased 50,000 tons to a record 525,000 tons. Third, Liberia’s 2014 import forecast was raised 40,000 tons to 270,000 tons. And finally, Djibouti’s import forecast was raised 30,000 tons to a record 75,000 tons.

In North Africa, Libya’s 2014 import forecast was raised 50,000 tons to a record 370,000 tons based on expectation of the continuation of this year’s strong pace of purchases. Finally, Mexico’s import forecast was raised 20,000 tons to a record 750,000 tons based on recommendations from the USDA Office in Mexico City. Imports are accounting for a growing share of Mexico’s rice consumption.

These upward revisions were partially offset by two downward revisions. First, Turkey’s 2014 import forecast was lowered 20,000 tons to 330,000 tons based on a larger crop. And second, the United States’ 2014 import forecast was lowered 15,000 tons to 725,000 tons based on a larger U.S. crop forecast for 2013/14.

The 2013 total global rice trade forecast was raised 0.5 million tons to 38.1 million, still almost 3 percent below the year-earlier record. There were four export revisions for 2013 this month. First, India’s 2013 export forecast was raised 700,000 tons to a near-record 9.7 million tons based on recommendations from the USDA Office in New Delhi. India has substantial supplies and is price competitive.

Second, Paraguay’s 2013 export forecast was raised 25,000 tons to 275,000 tons based on a very strong shipment pace, with most exports going to Brazil. Paraguay has expanded production and exports in the past 6 years.

These upward export revisions were partially offset by two downward revisions. First, China’s 2013 export forecast was lowered 100,000 tons to 350,000 tons based on a smaller crop. And second, Argentina’s 2013 export forecast was cut 100,000 tons to 525,000 tons based on the smaller crop estimate and a slower than expected export pace to date.

There were several major import revisions for 2013 this month, mostly in Africa. All are based on a strong delivery pace to date. Import forecasts were raised this month for Cameroon, Djibouti, Liberia, Libya, and Senegal. Outside Africa, China’s 2013 import forecast was raised 200,000 tons to a near-record 3.2 million tons based on poor weather conditions impacting the 2013/14 crop and a very strong import pace through June. China has moved from major exporter status as recently as 2008 to being the world’s largest rice importer. Lower prices for imported rice and the high cost to expanding output are major factors behind China’s recent imports of large amounts of rice.

Thailand’s Trading Prices Continue To Decline

Prices for most grades of Thailand’s higher and medium-quality regular-milled white rice declined 2-3 percent over the past month, mostly a result of Government sales of its rice stocks and few new export sales. Prices for parboiled rice have declined as well, while prices for aromatic rice have increased. 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 $506 per ton for the week ending August 13, down $17 from the week ending July 8. Prices for Thailand’s 5-percent brokens were quoted at $495 per ton for the week ending August 13, down $14 from the week ending July 8. Prices for Thailand's 5-percent parboiled rice were quoted at $530 per ton for the week ending August 13, down $8 from the week ending July 8.

Prices for Thailand’s brokens have declined as well. For the week ending August 13, prices for Thailand’s A-1 Super 100-percent brokens were quoted at $440 per ton, down $25 from the week ending July 8. In contrast, price quotes for Thailand’s premium jasmine rice, an aromatic variety, were quoted at $1,133 per ton for the week ending August 13, up $15 from the week ending July 8. 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, mostly due to large sales to China, recent Government purchases, and an announced higher Minimum Export Price for 25-percent-broken rice. For the week ending August 6, prices for Vietnam’s 5-percent double-water-polished with 5-percent brokens were quoted at $400 per ton, up $25 from July 9. Thailand’s price quotes for 5-percent brokens are currently $96 per ton above quotes for Vietnam’s 5-percent doublewater- polished milled rice, down from $134 a month earlier.

U.S. prices for long-grain milled rice have declined since early July as the pace of sales has slowed. For the week ending August 6, 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 $606 per ton, down $33 from the week ending July 9. Prices for U.S. long-grain rough-rice (bulk, fob vessel, New Orleans) were quoted at $385 per ton for the week ending August 6, down $15 from the week ending July 9, with new sales slow as well.

Prices for California milled rice for the U.S. market have remained unchanged over the past month. California’s package-quality medium-grain rice (bulk) for domestic sales to processors and repackagers were quoted at $661 per ton for the week ending August 6, unchanged from a month earlier. Export prices (sacked, Port of Oakland) for California milled rice were reported at $750 per ton for the week ending August 6, also unchanged from early July. 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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