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USDA Rice Outlook


12 February 2014

USDA Rice Outlook - 12 February 2014USDA Rice Outlook - 12 February 2014


USDA Rice Outlook

There were no supply side revisions to the 2013/14 supply and use tables. Total U.S. rice supplies in 2013/14 remain projected at 247.3 million cwt, 5.5 percent smaller than a year earlier. The 2013/14 carryin remains estimated at 36.4 million cwt, 11 percent smaller than a year earlier. Production remains estimated at 189.9 million cwt , down 5 percent from a year earlier. U.S. rice imports remain forecast at 21.0 million cwt, virtually unchanged from a year earlier.

On the use side, total exports were raised 1.0 million cwt to 100.0 million cwt. Total domestic and residual use is unchanged, but there was a 1.0-million cwt switch to longgrain from combined medium- and short-grain domestic use. The stronger all-rice export forecast resulted in a 1.0-million cwt reduction in the 2013/14 ending stocks forecast to 27.3 million cwt.

The 2013/14 season-average farm price (SAFP) range for U.S. long-grain rice was revised to $15.10-$15.70 from $14.80-$15.80 a month earlier, with the midpoint up 10 cents. The combined medium- and short-grain 2013/14 U.S. SAFP range was revised to $17.20-$17.80 per cwt from $16.30-$17.30 per cwt, an increase in the mid-point of 70 cents.

The 2013/14 global rice production forecast was raised 0.4 million cwt to 471.5 million tons (milled basis), the highest on record. Production forecasts were raised for Bangladesh and Japan. Global rice use (including a residual component) for 2013/14 is projected at a record 473.3 million tons, up 0.3 million from last month. The global ending stocks forecast for 2013/14 was lowered 0.2 million tons to 105.0 million tons.

Total calendar year 2014 global rice trade is forecast at a record 40.4 million tons, up 0.2 million tons from the previous forecast. Export forecasts were raised for Argentina, Turkey, and Venezuela. Import forecasts were raised for Colombia, Russia, South Korea, and Turkey. For 2013, Vietnam’s exports were lowered 400,000 tons, while export estimates for both Pakistan and the U.S. were raised. 

Prices for California milled rice for the U.S. market and global market have sharply increased over the past month, mostly over concerns of substantially reduced acreage this year resulting from a record drought in the State. U.S. prices for long-grain milled rice have decreased slightly since late January. Prices for most grades of Thailand’s high-quality, regular-milled white rice have increased 1-2 percent over the past month, while prices for medium- and lower-quality rice are unchanged. Price quotes from Vietnam have decreased since early January.

Domestic Outlook 

U.S. 2013/14 Total Rice Supplies Remain Forecast at 247.3 Million Cwt

There were no supply side revisions to the 2013/14 supply and use tables. 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. In contrast, combined medium- and short-grain production is estimated to have increased 5 percent to 58.0 million cwt. Rice production was smaller than a year earlier in 2013/14 in Arkansas, Mississippi, Missouri, and Texas.

The production decline is the result of an 8-percent decline in all rice plantings to 2.49 million acres, the smallest since 1987/88. The decline was a result of weather problems early in the season in the Delta and higher returns for alternative crops in the South. Rice area is estimated lower than last year in 2013/14 in Arkansas, Mississippi, and Missouri, with Arkansas accounting for the bulk of the 211,000- acre drop in plantings. In contrast to area, the 2013/14 all-rice yield is estimated at a record 7,694 pounds per acre, 245 pounds above a year earlier. Yields are higher than a year earlier in all reported States except Texas, with Louisiana reporting the largest percentage increase. Record yields were reported for Arkansas, Louisiana, Mississippi, and Missouri. Increased adoption of hybrid varieties in the South has boosted yields.

U.S. rice imports remain forecast at 21.0 million cwt, virtually unchanged from a year earlier and the third highest on record. Through December, shipments from Southeast Asia—the largest source of U.S. rice imports—were behind a year earlier. Long-grain imports remain forecast at 18.5 million cwt, 1 percent below a year earlier but still the second largest on record. Thailand is the largest supplier of longgrain imported 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 United States. In years when U.S. supplies of brokens are tight, 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.

Total U.S. rice supplies in 2013/14 remain projected at 247.3 million cwt, 5.5 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 remain forecast at 72.7 million cwt, fractionally above a year earlier.

U.S. 2013/14 All Rice Export Forecast Raised to 100.0 Million Cwt

Total use of U.S. rice in 2013/14 is projected at 220.0 million cwt, up 1.0 million cwt from last month’s forecast but still 2 percent below a year earlier. Long-grain accounts for all of this month’s revisions on the use side. Long-grain total use is projected at 156.0 million cwt, up 1.0 million cwt from last month’s forecast but 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.

Total domestic and residual use of all rice in 2013/14 remains projected at 120.0 million cwt, with 1.0 million cwt switched between classes. Long-grain domestic and residual use is projected at 89.0 million cwt, up 1.0 million cwt from the January forecast but nearly unchanged from a year earlier. This upward revision was offset by a 1.0-million cwt decrease in the combined medium- and short-grain domestic and residual forecast to 31.0 million cwt, still 7 percent higher than a year earlier. The downward revision was based on rising prices and tighter supplies resulting from a stronger pace of exports.

Total exports in 2013/14 are projected at 100.0 million cwt, up 1.0 million cwt from January but 7 percent below a year earlier. These are the smallest U.S. rice exports since 2008/09. The year-to-year expected decline is based on smaller U.S. supplies and a larger price difference over Asian exporters, with Central America and Sub- Saharan Africa expected to account for most of the decline.

Long-grain exports remain projected at 67.0 million cwt, 12 percent below a year earlier. Through January, combined shipments and outstanding sales to Central America and Sub-Saharan Africa have trailed 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 are projected at 33.0 million cwt, up 1.0 million cwt from the previous forecast and 6 percent above a year earlier. Thus, upward revision was largely based on stronger than expected sales to the Middle East.

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, with all purchases by these three countries the result of annual WTO commitments. The Middle East and North Africa account for most of the remaining U.S. mediumand short-grain exports, with Egypt the main competitor for the United States in these two regions.

By type, rough-rice exports are projected at 36.0 million cwt, up 1.0 million cwt from the previous forecast and 5.0 percent above 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) remain projected at 64.0 million cwt, 12 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. 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 January 30, 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. By class and type, combined outstanding sales and exports of long-grain rough-rice were 9 percent behind a year earlier for the week ending January 30, down from 11.5 percent behind a month earlier. Combined mediumand short-grain rough-rice outstanding sales and exports were 142 percent ahead of a year earlier through January 30, 2014, up from 94 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 19 percent behind a year earlier for the week ending January 30, and combined medium- and short-grain milled rice exports were 2 percent behind those 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 27.3 million cwt, down 1.0 million cwt from the January forecast and 25 percent below a year earlier. These are the lowest U.S. ending stocks since 2003/04. The stocks-to-use ratio is calculated at 12.4 percent, down from 16.2 percent in 2012/13, also the smallest since 2003/04.

By class, the 2013/14 U.S. long-grain carryout is projected at 16.3 million cwt, down 1.0 million cwt from last month’s forecast and 26 percent smaller than a year earlier. The long-grain stocks-to-use ratio is 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 remains projected at 8.7 million cwt, down 1.7 million cwt from the January forecast and 29 percent below a year earlier. The medium/short-grain stocks-to-use ratio is calculated at 13.6 percent, down from 20.3 percent in 2012/13 and the lowest since 1998/99.

This month, the 2013/14 milling yield was raised 0.75 of a percentage point to 71.00 percent based on Farm Service Agency (FSA) warehouse stored loan data for long, medium, and short grain rice. The year-to-year change in the FSA average allrice milling yield is applied to the WASDE- reported 2012/13 milling yield to calculate the 2013/14 forecast average milling yield of 71.00 percent. The 2013/14 milling yield is 1.0 percentage point above a year earlier.

U.S. 2013/14 Season-Average Farm Price Forecast Raised for Mediumand Short-Grain Rough-Rice

The 2013/14 season-average farm price (SAFP) range for U.S. long-grain rice was revised to $15.10-$15.70 per cwt from $14.80-$15.80 a month earlier, with the midpoint up 10 cents. This compares with a 2012/13 revised SAFP of $14.50 per cwt.

This month’s upward revision was based on monthly cash prices and marketings through December 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 to $17.20-$17.80 per cwt from $16.30-$17.30 per cwt, an increase in the mid-point of 70 cents. This compares with a revised 2012/13 SAFP of $17.40 per cwt. This month’s upward revision was based on monthly reported cash prices and marketings through December and expectations regarding prices the remainder of the market year. Through early February, Northern California has experienced one of the driest winters on record with reservoir levels extremely low. Concerns over water availability for planting the 2014/15 California crop are putting upward pressure on prices.

In late January, NASS reported a mid-January U.S. long-grain rough-rice price of $15.30 per cwt, down 20 cents from the December estimate. The December longgrain price is the highest since January 2009. For combined medium- and shortgrain rice, the mid-January NASS price was reported at $16.90 per cwt, up $1.20 from the revised December price. The December price was lowered 80 cents from the midmonth estimate to $15.70 per cwt. In January, NASS made revisions for monthly cash prices and marketings for 2012/13 and 2013/14.

International Outlook 

Production Forecasts for 2013/14 Raised for Bangladesh and Japan

Global rice production for 2013/14 is forecast at a record 471.5 million tons (milled basis), up 0.4 million tons from last month’s forecast and 2.0 million cwt larger than a year earlier. On a year-to-year basis, Southeast Asia is projected to produce a record rice crop, with near-records projected for South Asia, East Asia, and Sub- Saharan Africa, all major producing regions.

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 2.6 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 4.39 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 three significant revisions to 2013/14 crop forecasts this month. First, Bangladesh’s 2013/14 production forecast was raised almost 0.2 million tons to a record 34.6 million tons based on information from the U.S. Agricultural Office in Dhaka reporting a larger Boro crop—harvested last May and June—that resulted from favorable weather that increased yields. The Boro crop, which is irrigated, is both the largest and highest-yielding of Bangladesh’s three annual rice crops. The Aus crop estimate, which was harvested last June and July, was lowered slightly due to flash floods in some northern districts. The 2013/14 total rice crop for Bangladesh was up 2 percent from a year earlier, a result of both record area and record yield. Bangladesh’s rice production has more than doubled over the past decade, with yield growth outpacing expanding area.

Second, Japan’s 2013/14 rice crop estimate was raised 112,000 tons to 7.83 million tons based on year-end Government data indicating a stronger yield. And third, the U.S. 2013/14 crop estimate was raised 64,000 tons to 6.1 million tons solely due to a higher milling rate. The crop is 4 percent smaller than a year earlier, a result of decreased plantings. The U.S. average yield is the highest on record. The U.S. 2013/14 rough-rice crop remains estimated at 8.6 million tons. There were three additional minor production revisions this month. First, Ukraine’s 2013/14 production was lowered 6,000 tons to 94,000 tons based on a lower yield. Second, Mexico’s 2013/14 production estimate was raised 6,000 tons to 135,000 tons. And third, Russia’s 2013/14 production estimate was raised 2,000 tons to 602,000 tons based on slightly higher area.

Global rice production in 2012/13 remains estimated at 469.5 million tons, up 1 percent from a year earlier and the second highest on record. The bumper global crop was partly due to a record crop in China and near-record crops in India and Southeast Asia. The only revision this month was a 7,000-ton increase in Colombia’s production to 1.3 million tons based on a larger area estimate reported by Fedarroz, the Colombian rice growers association. The yield was actually lowered slightly. 

Global rice use (including a residual component) for 2013/14 is projected at a record 473.3 million tons, up 0.3 million from the previous forecast and more than 1 percent larger than a year earlier. Japan’s 2013/14 rice use forecast was raised slightly this month. 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 105.0 million tons, down 0.2 million tons from the previous forecast and 1.8 million tons below a year earlier. This is the first decline since 2006/07 in global ending stocks. Ending stocks forecasts were lowered this month for Argentina, Pakistan, South Korea, and the United States, but raised for Bangladesh and Colombia. 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, 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 22.2 percent, down slightly from a year earlier.

Vietnam’s 2013 Export Estimate Lowered; U.S. Export Estimate Raised

Total calendar year 2014 global rice trade is forecast at a record 40.4 million tons, up 0.2 million tons from the previous forecast and 2.1 million tons above 2013. Global trade in 2014 is mainly driven by strong purchases by China and West Africa. On the supplier’s side, India is projected to again be the largest exporter, with Thailand and Vietnam expected to increase exports.

There were several small export revisions this month. First, in South America, Argentina’s 2014 export forecast was raised 70,000 tons to 620,000 tons based on a weaker currency that makes its exports more price competitive. Also, Venezuela’s 2014 exports were raised 25,000 tons to 100,000 tons based on recommendations from the U.S. Agricultural Office in Caracas. These are the second highest exports for Venezuela. In the Middle East, Turkey’s 2014 export forecast was increased 50,000 tons to 600,000 tons based on recommendations from the U.S. Agricultural Office in Ankara. Finally, Russia’s 2014 export forecast was raised 40,000 tons to 140,000 tons based on stronger reported shipments in 2012 and 2013.

There were several 2014 import upward revisions this month. In South America, Colombia’s 2014 import forecast was raised 50,000 tons to a near-record 325,000 tons based on stronger demand. In Asia, South Korea’s 2014 import forecast was raised 35,000 tons based on information from the U.S. Agricultural Office in Seoul indicating the expected timing of its WTO imports. Turkey’s imports were increased 50,000 tons to 330,000 tons on information from the U.S. Agricultural Office in Ankara stating that the TMO (the Turkish Grain Board) continues to import California rice. The U.S. 2013 import forecast was increased 25,000 tons to 675,000 tons based on year-end trade data. Finally, Russia’s 2014 import forecast was raised 30,000 tons to 250,000 tons based on Customs Union data reporting stronger imports in 2012 and 2013. These upward revisions were partially offset by a 130,000-ton reduction in Bangladesh’s 2014 import forecast to 300,000 tons based on a larger crop. 

Global trade for 2013 remains estimated at 38.3 million, 2 percent below a year earlier. Upward revisions were virtually offset by reductions. The only downward export revision was a 400,000-ton reduction in Vietnam’s 2013 export estimate to 6.8 million tons. Vietnam’s exports were 12 percent below a year earlier. The decline was largely due to smaller purchases by major Asian buyers. This downward revision was offset by several increases. In Asia, Pakistan’s 2013 exports were raised 200,000 tons to 3.5 million tons and China’s 2013 export estimate was raised 22,000 tons to 447,000 tons. Outside Asia, Brazil’s 2013 exports were raised 80,000 tons to 830,000 tons, Russia’s 2013 exports increased 20,000 tons to 140,000 tons, and U.S. exports increased 71,000 tons to 3.271 million tons.

There were several 2013 import revisions this month, mostly based on year-end trade data. In Sub-Saharan Africa, Nigeria’s imports were lowered 200,000 tons to 2.6 million tons based on trade data through November. Bangladesh’s 2013 imports were lowered 87,000 tons to 213,000 tons and South Korea’s 2013 imports were reduced 47,000 tons to 553,000 tons. These reductions were offset by several upward revisions. First, Madagascar’s 2013 imports were raised 100,000 tons to 350,000 tons based on tight domestic supplies and Russia’s 2013 imports were increased 45,000 tons to 245,000 tons based on Customs Union data.

California’s Export Prices Sharply Increase

Prices for most grades of Thailand’s high-quality, regular-milled white rice have increased 1-2 percent over the past month, while prices for medium- and lowerquality rice are unchanged. The price increases are largely due to a temporary hold on the sale of Government stocks, expected to resume this month. Prices for aromatic rice have decreased, while parboiled prices have risen about 1 percent.

Prices for Thailand's high-quality, 100-percent Grade B (fob vessel, Bangkok) milled rice for export were quoted at $422 per ton for the week ending February 10, up $8 from the week ending January 6.Prices for Thailand’s 5-percent brokens were quoted at $405 per ton for the week ending February 10, up $4 from the week ending January 6. Prices for Thailand's 5-percent parboiled rice were quoted at $444 per ton for the week ending February 10, also up $4 from the week ending January 6.

Prices for Thailand’s brokens are unchanged. For the week ending February 6, prices for Thailand’s A-1 Super 100-percent brokens remain quoted at $310 per ton. In contrast, price quotes for Thailand’s premium jasmine rice, an aromatic variety, were quoted at $989 per ton for the week ending February 10, down $29 from the week ending January 6 and down $181 from early December. 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 decreased, mostly due declining prices from other sources and expectations of the start of its main winter-spring crop harvest late this month. For the week ending February 4, prices for Vietnam’s 5-percent doublewater- polished with 5-percent brokens were quoted at $395 per ton, down $15 from January 7. Thailand’s price quotes for 5-percent brokens are currently $10 per ton above quotes for Vietnam’s 5-percent double-water-polished milled rice. 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 decreased slightly since late January, mostly as a response to much lower global prices. For the week ending February 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 $579 per ton, down $11 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 a month earlier. Prices for U.S. long-grain roughrice (bulk, fob vessel, New Orleans) remain quoted at $380 per ton for the week ending February 4, unchanged since late September.

In contrast, prices for California milled rice for the U.S. market and global market have sharply increased over the past month, 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 $772 per ton for the week ending February 4, up $144 from January 7. Export prices (sacked, port of Oakland) for California milled rice were quoted at $950 per ton for the week ending January 28, up $275 from January 7 and the highest since July 2009. There have been no export quotes this month for California milled rice. These are the most rapid price increases for U.S. rice since the 2008 price spike. 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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