WORLD RICE SITUATION AND OUTLOOK
Indonesia continues to be the dominating factor in the Asian rice market. Thailand and Vietnam saw strong exports during January, primarily due to the heavy loadings for Indonesia. This activity provided support to prices, although Thai quotes fluctuated throughout the month on the value of the baht and concerns about Indonesias ability to open letters of credit. However, shipments continued to move, and prices managed to end the month about $30/MT higher than they began. In Vietnam, quotes for lower grades remained steady throughout the month, but quotes for 5% ended the month down about $10/MT. The U.S. market softened a couple of dollars per ton during January despite sales to Japan and several Latin American destinations.
The 1998 rice export forecast for Thailand was raised to 5.8 million tons due to an increase in the production forecast. Favorable conditions are expected to boost second crop yields, and strong world demand should draw most of this rice into export channels.
The 1997 estimate for Argentina was lowered to 525,000 tons on slower than expected shipments late in the year. The 1997 estimate for Burma was lowered to 15,000 tons.
The 1998 import forecast for Indonesia was raised to 3 million tons due to a decline in the 1997/98 production forecast. 1997/98 production is now forecast at 47.7 million tons (rough basis), down 1.5 million tons from last months estimate and an 800,000 ton decrease from the previous years drought-reduced crop. The imports are expected to be heavily weighted to the first quarter, but the reduced crop and lower supplies will mean additional quantities will be needed throughout the year.
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