Developing Countries Will Lead Global Rice Import Growth in 2013-22, Says USDA Rice growers positive California MG prices are UP Russia MG Harvest coming to end Egypt open rice exports Vietnam’s rice export in tough competition with India Thai rice exports in May Rise Above Target This Year Viet-Nam Rice exports likely to fall this year
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Strong rice prices are likely for 2008-09
Nathan Childs, an economist with USDA's Economic ResearchService, can't recall a rosier price projection for ricesince he began presenting outlooks at the USA Rice OutlookConference 12 years ago.

In fact, U.S. rice prices are higher than they've beensince 1981 for rough rice, and since 1994 for milled rice, thanksto higher prices in other commodities including wheat, soybeans andfeedgrains, rising global prices for rice, tight supplies in otherexporting countries, the expectation of the smallest carryout in 26years, and export bans by India and Vietnam that will likely belifted in early 2008.

The export bans essentially "put the No. 1 and No. 2shippers out of business," Childs said to the gathering inOrlando. "Drought in Australia has cut supplies for mediumand short-grain rice. It's a small market, only about 12percent of the global trade, but the United States would like togain marketshare."

Childs noted that as of this month, "outstanding ricesales are double that of a year ago, with total commitments upabout 40 percent, so the year has started off verystrong."

It adds up to U.S. exports projected 17 percent higher than ayear ago. "Both long and medium-grain exports are expectedhigher in 2007-2008. Milled and rough rice exports are up from ayear ago, with rough up about 6 percent and milled rice up aprojected 23 percent than a year ago.

"Rough rice exports are higher due to greater sales inMexico and Central America where sales this year are about doublefrom a year earlier. But they're probably buying early inexpectation of higher prices later. I would not factor the kind ofsales that have existed so far for the rest of the marketingyear."

The export outlook includes a recovery in the EU-27 and strongshipments to the Middle East where the United States competes withAsian exporters.

The U.S. average farm price (rough basis) is projected at thehighest level since 1981 at around $11 per hundredweight, notedChilds. "Even during our El Nino years, we only were barelyaround $10 per hundredweight.

"Milled rice prices have also risen sharply this fall.Almost every week, a new report shows slightly higher prices inEurope. California prices are high despite the big carry-in and alarge crop."

Childs noted that U.S. prices for both long and medium-grainmilled rice are the highest since early 1994, when Japan beganpurchasing its 2.2 million tons of emergency purchases.Thailand's prices are the highest since the spring of1997.

A couple of wet blankets are the highest fuel and fertilizercosts Childs has ever seen. It's only barely comforting thatthe rest of the world's rice producers are suffering too.Another downer is that U.S. rice imports are projected at recordlevels for 2007-2008. This is due to a long-term increase of ThaiJasmine and basmati from India and Pakistan. China and Indiacontinue to ship rice to the Puerto Rican market. In addition,Thailand ships about 60,000 to 70,000 tons of rice to the UnitedStates each year classified as medium, short-grain.

In the United States, USDA has projected average rice yield for2007 at a record 7,247 pounds, up about 6 percent from last year."We had generally favorable weather in almost every growingarea. There were record yields in all southern states except Texas.California had a very big yield boost, but it wasn't quite arecord."

Despite good yields and a slightly larger crop, U.S. endingstocks for rice are expected to plunge by 31 percent in 2007-2008,according to Childs. "There really isn't on average anexcess supply of U.S. rice. However, by class, long-grain stockshave dropped 56 percent. Medium-short stocks are expected to go upabout a third."

For 2008-2009, "There will be a little bit of an increasein U.S. rice acres, because we need more rice," Childs said."We'll see higher input costs and a return to a trendyield, a much smaller carry-in, another year of record imports, aslightly larger crop, smaller supplies, larger domestic use and abigger market."

Exports will likely decline, not due to price competitiveness orlack of demand, rather, there just won't be enough rice toship. Childs also projects a smaller carryout, higher globalprices.

"We don't have a price projection for 2008-2009, buteverything is bullish. I'd be hard pressed to come up with afactor that would likely reduce the U.S. price going into2008-2009. Bullish factors include higher world prices, tighterU.S. supplies, stagnant local area and no growth in global riceyields in several years."
MGR Archive 13.1.2008
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