USDA Rice Outlook

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14 November 2012

USDA Rice Outlook - November 2012

There were two supply-side revisions this month to the U.S. 2012/13 rice balance sheet. First, the production forecast was lowered 0.3 million cwt to 198.5 million cwt based on a slightly lower yield.

U.S. 2012/13 Export Forecast Raised to 103.0 Million Cwt

Despite this month’s downward revision, the average yield is the highest on record. Second, total rice imports were raised 1.0 million cwt to 20.5 million cwt, the highest since 2007/08.

On the use side, 2012/13 U.S. exports were raised 3.0 million cwt to 103.0 million cwt, with long-grain milled-rice accounting for all of the upward revision. On balance, these revisions resulted in a 2.3-million cwt reduction in the U.S. ending stocks forecast to 30.1 million cwt.

The 2012/13 season-average farm price (SAFP) for U.S. long-grain rice was raised 50 cents per cwt on both the high and low ends this month to $13.70-$14.70 per cwt, up from $13.40 per cwt a year earlier. The combined medium- and short-grain 2012/13 U.S. SAFP remains forecast at $16.50-$17.50 per cwt, compared with $16.50 a year earlier.

Global rice production for 2012/13 is forecast at 464.3 million tons (milled basis), down 0.8 million tons from last month’s forecast and fractionally below the year-earlier record. Production forecasts for 2012/13 were lowered for Bangladesh, South Korea, Sri Lanka, and Thailand; but raised for Vietnam, Uruguay, and Russia. Global ending stocks for 2012/13 are projected at 102.3 million tons, up 0.3 million tons from last month’s forecast, but 3.6 million tons below a year earlier.

Total calendar year 2013 global rice trade is forecast at 36.1 million tons, up slightly from last month’s forecast, but nearly 6 percent below the year-earlier record. Import forecasts were raised for China, South Korea, Thailand, Iraq, and Colombia. Calendar year 2012 global rice trade was raised almost 0.5 million tons to a record 38.2 million. Import forecasts were raised for China, Thailand, Cote d’Ivoire, Senegal, and Nigeria.

Prices for most grades of Thailand’s higher-quality non-specialty white milled-rice have risen slightly over the past month as exporters purchase more rice to fulfill contracts with Nigerian exporters. Price quotes from Vietnam have increased over the past month largely due to strong sales to Africa and Indonesia. U.S. prices for long-grain milled rice have risen slightly over the past month, while prices for California milled rice for the domestic market have remained unchanged.

Domestic Outlook

U.S. 2012/13 Crop Forecast Lowered to 198.5 Million Cwt

The 2012/13 U.S. rice production forecast is lowered 0.3 million cwt to 198.5 million cwt, still 7 percent larger than a year earlier. This month’s downward revision was the result of a slightly lower yield forecast. The average field yield was decreased 11 pounds per acre to 7,417 pounds. Despite this month’s downward revision, the average yield is 5 percent higher than a year earlier and the highest on record. There were no area revisions this month. Harvested area remains estimated at 2.68 million acres, an increase of 2 percent from a year earlier.

The long-grain rice production forecast is lowered 0.2 million cwt to 139.8 cwt, 20 percent larger than a year earlier. The combined medium- and short-grain production forecast is lowered 0.1 million cwt to 58.7 million cwt, more than 14 percent below the year-earlier near-record.

California and Louisiana account for all of this month’s downward revision in average yield. California’s yield was lowered 150 pounds per acre to 8,300 pounds, 45 pounds below a year earlier. The California rice crop was planted late this year and the temperatures have been cooler than normal this fall. Louisiana’s 2012/13 yield forecast was reduced 100 pounds per acre to 6,500 pounds, still 3 percent higher than a year earlier and the highest on record. The lower yield forecasts reduced production forecasts in both States’ almost 2 percent from last month.

In contrast, average yield forecast were raised this month for Arkansas, Missouri, and Texas. Missouri’s yield was raised 200 pounds per acre to a record 6,900 pounds, 6 percent higher than a year earlier. The average Texas yield was raised 50 pounds per acre to a record 8,150 pound,13 percent above a year earlier. In Arkansas, the average yield was raised 40 pounds per acre to a record 7,340 pounds, almost 9 percent above last year. The average Mississippi field yield remains forecast at 7,100 pounds per acre, up 4 percent from a year earlier. The higher yield raised the Missouri production forecast 3 percent. Production forecasts for Arkansas and Texas were raised less than 1 percent due to higher forecasted yields.

Harvested area is estimated lower in all reported States in 2012/13 except Arkansas and Missouri, with Texas reporting the largest decline. At 134,000 acres, harvested area in Texas is 26 percent below a year earlier. The State has suffered from severe drought and has instituted water restrictions this year. At 123,000 acres, Mississippi’s harvested area is 22 percent below a year earlier and the lowest since 1977/78. California’s 2012/13 harvested area is estimated at 563,000 acres, down 3 percent from last year. Louisiana’s rice harvested area declined 4 percent from 2011/12 to 400,000 acres, the smallest since 2007/08. In contrast, harvested rice acreage in Arkansas rose 11 percent to 1.28 million acres and harvested rice acreage in Missouri increased 38 percent to 177,000 acres. On balance, area expansions in Arkansas and Missouri more than offset area contractions in the remaining reported States, resulting in a 59,000-acre increase in U.S. harvested area in 2012/13.

Arkansas and Missouri account for all of the expected increase in U.S. rice production in 2012/13. At 94.0 million cwt, rice production in Arkansas is up almost 20 percent from a year earlier, a result of both expanded area and a higher yield. Missouri’s production of 12.2 million cwt is up 47 percent from a year earlier, also due to larger plantings and a higher yield. In contrast, Louisiana’s rice crop of 26.0 million cwt is almost 2 percent below last year, a result of smaller plantings. At 10.9 million cwt, the Texas 2012/13 rice crop is 16 percent below a year earlier and the smallest since 1949/50, a result of smaller area. Mississippi’s production of 8.7 million cwt is 19 percent below a year earlier, a result of smaller plantings. California’s production is projected to decline almost 4 percent from last year to 46.7 million cwt, mostly due to smaller plantings.

By November 4, the entire southern crop was harvested. Crops were harvested 1-2 weeks ahead of normal across the South, a result of early planting. In contrast, 76 percent of the California crop was harvested by November 4, behind the 5-year average of 89 percent.

Total U.S. Rice Supplies Projected To Be Up 3 Percent in 2012/13

The total supply forecast for 2012/13 was raised fractionally this month to 260.1 million cwt, almost 3 percent larger than a year earlier. A higher import forecast more than offset a slightly weaker crop projection. By class, long-grain supplies are projected at 182.1 million cwt, up 0.8 million cwt from last month’s forecast and 8 percent larger than a year earlier. Medium- and short-grain supplies are forecast at 75.9 million cwt, fractionally below last month’s forecast and 7 percent below a year earlier.

The 2012/13 all rice carryin remains estimated 41.1 million cwt, 15 percent below a year earlier. The long-grain 2012/13 carryin remains estimated at 24.3 million cwt, 32 percent below a year earlier. The medium- and short-grain carryin remains estimated at 14.7 million cwt, up 45 percent from a year earlier. Stocks of brokens, included in the all-rice stocks estimate, are not classified by class.

Total rice imports for 2012/13 are projected at 20.5 million cwt, up 1.0 million cwt from last month’s forecast and 6 percent above a year earlier. These are the largest imports since 2007/08. The upward revision was largely based on a 38,000-ton shipment of broken kernels from Vietnam reported in the U.S. Census September trade data. The U.S. typically imports very little rice from Vietnam and only imports brokens when domestic supplies are tight. Brokens are used almost exclusively in processed uses such as beer and pet foods. The U.S. imported 84,700 tons (actual shipment weight) of rice in September, one of the highest monthly totals on record.

Long-grain imports are projected at a record 18.0 million cwt, up 1.0 million cwt from last month’s forecast and 6 percent higher than a year-earlier. Thailand supplies the bulk of U.S. long-grain imports, mainly shipping its premium jasmine rice, an aromatic. Basmati rice from India and Pakistan accounts for most of the remaining U.S. long-grain imports. Medium- and short-grain imports remain projected at 2.5 million cwt for 2012/13, up 3 percent from a year earlier. Specialty rice from Thailand that is classified as mediumand short-grain accounts for the bulk of U.S. medium- and short-grain imports. Arborio rice from Italy accounts for most of the remainder.

U.S. 2012/13 Export Forecast Raised 3.0 Million Cwt to 103.0 Million Cwt

Total use of U.S. rice in 2012/13 is projected at 230.0 million cwt, up 3.0 million cwt from last month’s forecast and nearly 9 percent above a year earlier. By class, long-grain total use is projected at 167.0 million cwt, up 4.0 million cwt from last month’s forecast and 15 percent above a year earlier. Medium- and short-grain total use is projected at 63.0 million cwt, down 1.0 million cwt from last month’s forecast and 6 percent below a year earlier. The year-to-year decline medium- and short-grain total use is based on tighter supplies and higher prices.

Total domestic and residual use of all-rice in 2012/13 remains projected at 127.0 million cwt, 15 percent higher than a year earlier. For long-grain, 2012/13 domestic and residual use remains projected at 95.0 million cwt, 22 percent larger than a year earlier. Medium- and short-grain domestic and residual use remains projected at 32.0 million cwt, down 1 percent from a year earlier.

Total exports of U.S. rice in 2012/13 are projected at 103.0 million cwt, up 3.0 million cwt from last month’s forecast and more than 1 percent above a year earlier. The upward revision was based on Census data through September, information from the November 8 U.S. Export Sales report, and expectations regarding sales and shipments the remainder of the market year. By market, Latin America accounts for most of the upward revision in U.S. 2012/13 exports.

By type, U.S. rough-rice exports remain projected at 33.0 million cwt, up 1 percent from a year earlier. Latin America is expected to remain the largest market for U.S. roughrice exports, with Mexico the biggest buyer. Milled rice exports (combined milled- and brown-rice exports converted to a rough-basis) are projected at 70.0 million cwt, an increase of 3.0 million cwt from last month’s forecast and nearly 2 percent above a year earlier. Northeast Asia, the Caribbean, the Middle East, and Canada are the largest markets for U.S. milled rice exports.

By class, long-grain exports are projected at 72.0 million cwt, 4.0 million cwt above last month’s forecast 8 percent above a year earlier. Medium- and short-grain exports are projected at 31.0 million cwt, 1.0 million cwt below last month’s forecast and 11 percent below the year-earlier near-record. The monthly downward revision is largely based on weaker sales to the Middle East. Some of the projected year-to-year decline is based on weaker U.S. shipments to Northeast Asia due to the timing of the region’s annual WTO imports. U.S. shipments to the region were abnormally high in 2011/12. Competition with Australia and Egypt will likely be more intense as well.

U.S. ending stocks of all-rice in 2012/13 are projected at 30.1 million cwt, down 2.3 million cwt from last month’s forecast and 27 percent below a year earlier. The stocksto- use ratio is calculated at 13.1 percent, down from 19.4 percent in 2011/12. By class, the 2012/13 U.S. long-grain carryout is projected at 15.1 million cwt, down 3.2 million cwt from last month’s forecast and 38 percent below a year earlier. The long-grain stocks-to-use ratio is calculated at 9.0 percent, down from 16.8 percent a year earlier and the lowest since 2003/04. A stock-to-use ratio of this level will likely put upward pressure on U.S. prices in 2012/13. The medium- and short-grain carryout is projected at 12.9 million cwt, up 0.9 million cwt from last month’s forecast, but 12 percent below a year earlier. The medium/short-grain stocks-to-use ratio is calculated at 20.5 percent, down from 21.9 percent in 2011/12.

U.S. 2012/13 Season-Average Price Forecast Raised for Long-Grain Rice

The 2012/13 season-average farm price (SAFP) for U.S. long-grain rice was raised 50 cents per cwt on both the high and low ends this month to $13.70-$14.70 per cwt, compared with $13.40 per cwt a year earlier. The upward revision was based on NASS prices through mid-October and expectations regarding prices the remainder of the market year. The combined medium- and short-grain 2012/13 U.S. SAFP remains forecast at $16.50-$17.50 per cwt, compared with $16.50 a year earlier. U.S. rough-rice prices for both classes of rice are being supported by higher prices for other grains and soybeans.

In late October, NASS reported a mid-October U.S. long-grain rough-rice price of $14.10 per cwt, up 30 cents from the revised September estimate. The September price was lowered 30 cents from the mid-month estimate to $13.80. For combined medium- and short-grain rice, the mid-October NASS price was reported at $17.90 per cwt, up 50 cents from the revised September price. The September price was raised 50 cents from the mid-month estimate to $17.40.

International Rice Market

Production Forecasts for 2012/13 Lowered for Bangladesh, South Korea, Sri Lanka, and Thailand

Global rice production for 2012/13 is forecast at 464.3 million tons (milled basis), down 0.8 million tons from last month’s forecast and fractionally below the year-earlier record. Global rice area is projected at 158.4 million hectares, 0.5 million hectares below a year earlier, with India accounting for most of the year-to-year decline. The average global yield is forecast at a record 4.37 tons per hectare, fractionally above 2011/12.

There were several downward revisions to 2012/13 production forecasts this month. First, Thailand’s production was lowered 0.55 million tons to 20.5 million tons based on information from the U.S. Agricultural Counselor in Bangkok indicating a reduced 2012/13 main-crop that was caused by deficient rainfall in the northeastern region, which is the major growing area for fragrant and glutinous rice. Both area and average yield for Thailand’s 2012/13 total production were lowered this month. Second, Bangladesh’s 2012/13 production forecast was lowered 0.3 million tons to 33.8 million based on information from the U.S. Agricultural Counselor in Dhaka reporting lower planted area of the Aman crop which was planted in July and August and will be harvested in November and December. The Aman crop faced a moderate to severe shortage of monsoon rainfall and was also affected by flash floods, especially in the north and south western region at planting.

Third, Sri Lanka’s 2012/13 2012/13 production was lowered 0.14 million tons to 2.86 million based on information from the U.S. Agricultural Counselor in Colombo reporting a smaller yala crop caused by drought. Fourth, South Korea’s 2012/13 production was lowered 0.2 million tons to 4.1 million based on smaller area and a lower yield reported by the Government of Korea. The crop is the smallest since 1980/81. Yield forecasts were lowered because of three strong typhoons that struck South Korea in late August and September during the critical filling stage which left empty kernels in many paddies.

There were three downward production revisions outside of Asia. First, Turkey’s 2012/13 production forecast was lowered 32,000 tons to 483,000 based on Information from the U.S. Agricultural Counselor in Ankara reporting smaller area and a weaker yield. In the Western Hemisphere, Mexico’s 2012/13 production forecast was lowered 25,000 tons to 128,000 tons based on smaller area reported by the Government of Mexico. Finally, the U.S. crop was lowered 10,000 tons to 6.33 million based on a slightly lower yield.

These downward revisions to 2012/13 production forecasts were partially offset by several upward revisions. First Vietnam’s 2012/13 production forecast was raised 0.22 million tons, a result of a larger area estimate, to a record 27.1 million tons based on information from the U.S. Agricultural Officer in Ho Chi Minh City reporting larger Spring and Autumn crops. Uruguay’s 2012/13 production forecast was raised 0.17 million tons to slightly over 1.0 million tons based on a higher area estimate. Both Vietnam and Uruguay are rice exporters. Russia’s 2012/13 crop forecast was raised 60,000 tons to 730,000 tons based on a record yield. This is the largest Russian rice crop since the break-up of the Soviet Union in 1989.

The 2011/12 global production forecast was fractionally lowered this month. Bangladesh’s production estimate was lowered 0.3 million tons to 33.7 million based on a weaker yield and lower area reported by the Government of Bangladesh. Mexico’s 2011/12 production was lowered 14,000 tons to 111,000 tons based on smaller area reported by the Government of Mexico. Both Bangladesh and Mexico are major importers, with Mexico the largest market for U.S. rice exports. These two downward revisions were partially offset by three upward revisions. First, Vietnam’s 2011/12 production estimate was raised 135,000 tons to 26.9 million tons based on a higher area estimate reported by the Government of Vietnam. Second, Uruguay’s 2011/12 production estimate was raised 66,000 tons to almost 1.0 million tons, also based on a larger area estimate. Third, Argentina’s 2011/12 production estimate was raised 12,000 tons to 1.02 million tons based on a higher yield.

Global rice disappearance for 2012/13 is projected at a record 467.9 million tons, down 0.7 million from last month’s forecast, but 2 percent larger than a year earlier. The consumption forecast was lowered this month for Bangladesh, but raised for Cote d’Ivoire, China, Senegal, and Nigeria. On a year-to-year basis, Bangladesh, Burma, China, India, Indonesia, Sub-Saharan Africa, Thailand, the United States, and Vietnam account for most of the expected increase in global domestic use.

Global ending stocks for 2012/13 are projected at 102.3 million tons, up 0.3 million tons from last month’s forecast, but 3.6 million tons below a year earlier. Global ending stocks in 2012/13 are the second highest in a decade. Ending stocks forecasts were raised this month for China, India, and Indonesia, but lowered for Thailand, the United States, and Vietnam. The global stocks-to-use ratio for 2012/13 is calculated at 21.9 percent, down from 23.1 percent a year earlier.

2012 Global Trade Forecast Raised to a Record 38.2 Million Tons

Total calendar year 2013 global rice trade is forecast at 36.1 million tons, up slightly from last month’s forecast, but nearly 6 percent below the year-earlier record. There were three small export revisions this month. First, the U.S. 2013 export forecast was raised 50,000 tons to 3.4 million tons based on faster pace of shipments and sales in recent months. U.S. exports are 0.2 million tons above the revised 2012 level. Russia’s 2013 export forecast was raised 10,000 tons to 170,000 tons based on larger supplies. In contrast, Argentina’s 2013 export forecast was lowered 35,000 tons to 525,000 tons based on tighter supplies.

On the 2013 import side, China’s import forecast was raised 500,000 tons to 2.0 million tons based on a strong pace of purchases this year. As in 2012, China is expected to be a net-importer in 2013. In nearby South Korea, imports were raised 240,000 tons to 640,000 based on the timing of the country’s World Trade Organization’s import commitments. These are the largest imports for South Korea since 1981. Thailand’s 2013 imports were raised 100,000 tons to 400,000 tons based on a continuation of this year’s rapid pace of purchases from bordering countries. Outside of Asia, Iraq’s 2013 import forecast was raised 50,000 tons to 1.35 million tons based on stronger consumption. In addition, Colombia’s 2013 import forecast was raised 50,000 tons to 180,000 tons based on the recently implemented U.S.-Colombia Free Trade Agreement that includes a duty-free tariff rate quota for U.S. rice into Colombia.

Calendar year 2012 global rice trade was raised almost 0.5 million tons to a record 38.2 million, up 2.0 million from last year. On the export side, India’s 2012 export forecast was raised 250,000 tons to a record 10.0 million tons based on strong shipments to West Africa. Uruguay’s 2012 export forecast was raised 200,000 tons to a record 1.1 million tons based on strong sales within the region and to Iraq. Vietnam’s 2012 export forecast was raised 200,000 tons to a record 7.2 million tons based on higher demand from China and Indonesia. Brazil’s 2012 exports were raised 100,000 tons to 1.2 million tons based on shipment pace. Argentina’s 2012 exports were raised 25,000 tons to 675,000 tons, based on shipment pace and a slightly larger crop.

These upward revisions were partially offset by a 200,000-ton reduction in the U.S. export forecast to 3.3 million tons based on Census trade data through September, information from the U.S. Export Sales report through October, and expectations regarding shipments in December. Burma’s 2012 export forecast was lowered 50,000 tons to 700,000 tons based on smaller exportable supplies of rice due to flooding.

There were several 2012 import revisions this month. First, in Asia, China’s import forecast was raised 700,000 tons to a record 2.6 million tons based on very large shipments from Vietnam. Thailand’s 2012 imports were raised 400,000 tons to a record 600,000 tons based on massive border trade. Indonesia’s 2012 imports were raised 200,000 tons to 1.7 million based on Government efforts to boost stock levels.

In Sub-Saharan Africa, Cote d’Ivoire’s 2012 imports were raised 300,000 tons to a record 1.3 million tons based on massive imports from India. Senegal’s imports were raised 250,000 tons to a record 1.2 million tons based on shipment pace, with India accounting for a large share. Nigeria’s imports were raised 200,000 tons to a record 3.2 million tons as large shipments from India continue. Traders continue to accumulate stocks in anticipation of higher levies. There were smaller upward revisions in 2012 import forecasts this month for Colombia, Iraq, Jordan, and Peru.

These upward revisions were partially offset by several import reductions. First, South Korea’s 2012 import forecast was lowered 360,000 tons to 240,000 based on slowerthan- expected timing of WTO purchases. Also in Asia, Vietnam’s 2012 imports were sharply lowered 300,000 tons to 100,000 tons based in delivery pace. EU imports for 2012 were lowered 100,000 tons to 1.3 million based on delivery pace. Mexico’s 2012 import forecast was lowered 90,000 tons to 640,000 tons based on recommendation from the U.S. Agricultural Counselor in Mexico City. Finally, U.S. imports were lowered 50,000 tons to 650,000 tons based on Census trade data through September.

Thailand’s Trading Prices Have Risen Slightly Because of Tighter Supplies

Prices for most grades of Thailand’s higher-quality non-specialty white milled-rice have risen slightly over the past month as exporters purchase more rice to fulfill contracts with Nigerian exporters. Prices for Thailand's high-quality, 100-percent Grade B (fob vessel, Bangkok) milled rice for export were quoted at $573 per ton for the week ending November 5, up $4 from the week ending October 8. Prices for Thailand’s 5-percent brokens were quoted at $560 per ton for the week ending November 5, up $3 from the week ending October 8.

Prices for Thailand's 5-percent parboiled rice—a specialty rice—were quoted at $594 per ton for the week ending November 5, up $21 from the week ending October 8. Prices for Thailand’s brokens have also risen over the past month. For the week ending November 8, prices for Thailand’s A-1 Super 100-percent brokens were quoted at $523 per ton, up $11 from the week ending October 8. Price quotes for Thailand’s premium jasmine rice—an aromatic—were quoted at $1,078 per ton for the week ending November 5, unchanged since early October. These are the highest prices for jasmine rice since December. 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 have increased over the past month due to strong sales to Africa and Indonesia. For the week ending November 6, prices for Vietnam’s 5-percent double-water-polished with 5-percent brokens were quoted at $455 per ton—up $15 per ton from the week ending October 9, but nearly unchanged from most of September. Thailand’s price quotes for 5-percent brokens are currently $105 per ton above quotes for Vietnam’s 5-percent double-water-polished milled rice, down $12 per ton from a month earlier.

U.S. prices for long-grain milled rice have risen slightly over the past month, partly due to strong export sales. For the week ending November 6, prices for high-quality Southern long-grain rice (No. 2, 4-percent brokens, bagged, free alongside vessel, U.S. Gulf port) were quoted at $595 per ton, up $5 from the week ending October 9. U.S. long-grain rough-rice (bulk, fob vessel, New Orleans) was quoted at $360 per ton for the week ending November 6, unchanged from the week ending October 9.

Prices for California milled rice for the domestic market have remained unchanged over the past month. California’s package-quality medium-grain rice (sacked) for domestic sales was quoted at $783 per ton for the week ending November 6. Export prices (for 30 kg bags, fob vessel) for California milled rice were quoted at $815 per ton for the week ending November 6, down $10 from the week ending October 9. To date, export sales have been slow this market year. 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.