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WORLD RICE SITUATION AND OUTLOOK
Global rice trade in calendar year 1999 is projected to reach 20.2 million tons, a 3.2 million ton decline from the record level forecast for 1998. World production is forecast at a record 575 million tons (rough), up nearly 7 million tons from 1997/98. Production is expected to increase in the major exporting countries, including Thailand, Vietnam, and the United States. China’s production is forecast to match the 1997/98 record level of 200 million tons (rough), allowing China to remain a net exporter in 1999 and continue to build stocks. The major swing is expected in the importing nations whose demand led 1998 trade to record levels. A return to normal weather is expected to increase production in Indonesian, Bangladesh, the Philippines and Brazil by a total of 6.4 million tons. As a result, import demand in Latin America and Asia is expected to decline substantially from the levels forecast for 1998.
The forecast for global rice trade in 1998 is increased this month to 23.4 million tons. Thai prices have been trending upward over the past month, with only minor interruptions due to currency fluctuations. As of early July, Thai 100B was quoted near $340 per ton, about $10 per ton higher than a month ago. Labor problems in Thailand have also contributed to the rise in prices. In Vietnam, quotes for 5 percent broken remained around $300 per ton throughout June as only limited new sales were allowed. India’s quotes remained relatively steady despite loading problems in the ports of Kandla (cyclone damage) and Kakinada (labor strike). U.S. quotes were virtually unchanged throughout the month as slow milling business offsets tightness of remaining old crop supplies.
Exporters
Calendar year 1999 exports by the United States are projected at 2.75 million tons, a 250,000 ton decline from the 1998 forecast. 1998/99 production is forecast to increase by 450,000 tons, to 8.6 million tons. The larger crop is mainly due to a 5 percent increase in area, as strong paddy prices and relatively low prices for alternative crops brought more land into rice production. Exports of rough rice are expected to continue to be a significant portion of total shipments in 1998/99, particularly to Mexico and Brazil.
The 1998 export forecast for Thailand is raised this month to 6 million tons due to an increase in the expected second crop production. In 1999, Thai exports are projected to drop to 5.7 million tons. Production is expected to reach a record 22.1 million tons (rough), as continued strong demand in 1998 keeps paddy prices high and rice remains an attractive cropping alternative.
Rice exports by Vietnam are projected at 3.5 million tons in calendar year 1999, a 100,000 ton decline from the projected 1998 level. 1998/99 production is projected to increase slightly over the previous year as high prices enjoyed by producers in 1998 will bring some additional land into rice production. However, slower world demand will likely keep Vietnam from matching the 1998 forecast.
1998/99 rice production in China is expected to match the 1997/98 record level of 200 million tons (rough), allowing China to remain a net exporter in 1999, while continuing to build stocks. Calendar year 1999 Chinese exports are projected to reach 1.75 million tons, and imports are projected at 500,000 tons. China is expected to continue its pattern of exporting low-quality and importing high-quality rice.
Calendar year 1999 exports from India are projected to reach 1.5 million tons, a 1 million ton decline from the 1998 forecast. Production in 1998/99 is expected to match the record crop of 1997/98. Continued growth in consumption, coupled with the projected decline in exports, will allow ending stocks to remain flat at 9 million tons.
Rice exports by Pakistan are projected at 1.75 million tons for calendar year 1999, a 250,000 ton decline from the forecast 1998 level. Reduced world demand is expected to translate into a slower export program and some rebuilding of stocks in 1999.
Argentina and Uruguay are expected to have increased exportable supplies in 1999, as production should rebound from the El Nino-reduced 1997/98 crop. As a result, Argentine exports are projected at 550,000 tons, up from the 400,000 ton forecast for 1998. Uruguay’s exports are projected at 600,000 tons, up from 525,000 tons forecast for 1998.
Importers
North America
Mexico is projected to import 300,000 tons in 1999, up 25,000 tons from the 1998 projected level due to a decline in production.
Rice imports by the United States are expected to remain flat at 350,000 tons in calendar year 1999. Imports are expected to continue to be primarily fragrant and specialty varieties.
Latin America
Additional area devoted to rice and a return to normal weather is expected to allow regional production to increase by a projected 2.5 million tons (rough) in 1998/99. As a result, imports are expected to decline, particularly imports from outside the region. Production in Ecuador is expected to increase by over 300,000 tons (rough), allowing Ecuador to return to a net exporter position. Ecuador’s imports are projected to drop to 50,000 tons in 1999 (from a forecast 130,000 tons in 1998), and exports are projected to reach 130,000 tons in 1999, up from a forecast 30,000 tons in 1998.
Brazil is expected to increase production by nearly 1.3 million tons (rough), due in part to a projected 300,000 hectare increase in area. As a result, imports are projected to fall to 1 million tons in calendar year 1999.
Middle East
Regional imports are projected to grow by 470,000 tons in 1999 on flat production and modest increases in consumption. Iran is expected be one of the three largest rice importers in the world, with imports projected to reach 1 million tons in 1999. Increased imports are also projected for medium grain importers Jordan and Syria.
Other Africa
Rice production in the Other Africa region is projected to decline in 1998/99 for the fourth year in a row. The drop in production, combined with increased supplies available on the world market, will allow regional imports to increase to over 4 million tons in calendar year 1999. Increases are projected for most destinations, including Guinea, Nigeria, and South Africa.
South Asia
1999 imports by Bangladesh are projected to drop to 350,000 tons from the forecast 1 million tons of imports required in 1998. 1998/99 production is projected to increase by 1.2 million tons (rough).
Other Asia
Regional imports are projected to fall by more than 4 million tons as a return to normal weather is expected to allow the importers that are driving 1998 trade to record levels to drastically reduce import requirements. Indonesia is projected to import 1.5 million tons in 1999, a 3.5 million ton decline from the record 5 million tons of imports forecast for 1998. 1998/99 Indonesian production is projected to increase by over 3.5 million tons (rough).
The 1998 import forecast for the Philippines is raised this month to 1.75 million tons on continued import purchases. In 1999, imports are projected to drop to 900,000 tons as a return to normal weather will allow production to rebound.
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