WORLD RICE SITUATION AND OUTLOOK
The forecast for world rice trade in 1998 is increased 400,000 tons this month, to a record 21.5 million tons. The surge in trade is lead by record demand by Indonesia and the Philippines, with a large part of this trade expected to occur in the first half of 1998. As such, the Asian market has been characterized by heavy loadings in recent weeks for these two destinations. Vietnam is believed to have shipped a record volume of rice in March, and as a result, quotes spiked upward nearly $40/MT during the month. Despite a record shipment pace and harvest of what is reportedly a good winter/spring crop out of the Mekong River Delta, the Viet market appears well oversold. Paki quotes also rose during March, gaining nearly $20/MT due to robust exports. Thai exports were also strong, but quotes continued to fluctuate within about a $10 range, ending the month at the high end of the range, but lagging year-ago levels.
The United States is now forecast to export 2.8 million tons in 1998. The 100,000 ton increase is due to continued strong exports of rough rice to Latin America.
The 1998 export forecast for Vietnam is increased to 3.6 million tons. Vietnamese exports are estimated at a record 1.25 million tons in the first quarter of 1998. The strong start to the year, along with substantial outstanding contracts, puts Vietnam well on the way to record exports.
The forecast for 1998 exports from Burma is lowered to 50,000 tons due to a decline in the 1997/98 production forecast and slow government procurement.
The 1998 export forecast for Taiwan is raised to 300,000 tons primarily due to expected business to Indonesia.
The 1998 import forecast for Indonesia is raised to a record 4 million tons. Indonesias rice import monopoly, Bulog, is believed to have contracted around 3 million tons for arrival in the first half of the year. Large imports are necessary to supplement a drought-reduced and delayed domestic crop.
South Korea failed to import all of its Uruguay Round-required minimum market access rice in 1997. Of the 77,000 tons of imports required in calendar year 1997, only about 30,000 tons arrived before the close of the year. As a result, the 1997 import estimate is reduced, and the 1998 forecast is increased to 150,000 tons to reflect the 1998 import requirement as well as the balance from 1997.
Imports by Iran have been off to a slow start in 1998 and are unlikely to exceed the level done in 1997. Therefore, the 1998 forecast is lowered to 1 million tons.
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