WORLD MARKETS AND TRADE:
COMMENTARY AND CURRENT DATA
WORLD MARKETS AND TRADE
China Turns Inward? In the first quarter of 2004, Chinese exports
followed a normal seasonal pattern. However, in the second quarter, locality
problems and sharp increases in domestic prices prompted China to virtually halt
exports and to simultaneously purchase regular white rice from neighboring
exporters, Thailand and Vietnam. Since the sudden burst in March, imports have
tapered off. Still, January-June 2004 import statistics show that China has
imported approximately 600,000 tons of which only 15 percent is fragrant Thai
jasmine rice. Meanwhile, exports have not picked up, perhaps in an attempt to
prevent another run-up in prices. It seems that China has turned its focus to
supplying the domestic market rather than the international market.
Additionally, there has been significant area-response to the new government
grain policy to expand production, which includes subsidized seed and
fertilizer, as well as direct payments. (See PDF version for charts)
International: World prices surged this month as demand for parboiled
and white rice drove prices for Thai 100B up $16, with quotes currently at $246
per ton, FOB. Viet prices have also strengthened despite the government policy
limiting the signing of new contracts. Viet 5% is currently quoted at $232 per
ton, FOB, up $4 from last month. India's 5% is down $3 at $252 per ton, FOB. (See
PDF version for chart)
Domestic: U.S. #2/4 long grain milled rice is currently quoted at $346
per ton, FOB, $60 less than last month. The spread between U.S. and Thai prices
has dramatically narrowed to $100 per ton compared to $176 last month. Prices
for U.S. #1/4 medium grain milled rice from California are quoted at $385 per
ton, bulk, ex-spout Sacramento.
TRADE CHANGES IN 2005
- United States is dropped 200,000 tons to 3.4 million based on
continued import restrictions by Turkey and less import demand in Latin
- China is down 200,000 tons to 1.0 million based on tight supplies.
- Thailand is boosted 500,000 tons to 8.5 million based on greater
market opportunities in Africa and the Middle East.
- United States is down 20,000 tons to 460,000 with higher supplies
of medium and short grain rice.
- Bangladesh is raised 100,000 tons to 600,000 due to crop loss from
flooding, which is expected to reduce production thereby increasing import
- Indonesia is lowered 200,000 tons to 1.8 million because of
- Despite a larger crop forecast, Philippines is boosted 200,000 tons
to 800,000 largely to maintain buffer stocks.
TRADE CHANGES IN 2004
- China is slashed 200,000 tons to 1.0 million as exports to major
African and Asian markets drop off during the second quarter.
- India expands 300,000 tons to 2.8 million due to stronger-than-anticipated
shipments to Bangladesh and Saudi Arabia.
- Pakistan is reduced by 100,000 tons to 1.8 million based on a slow
export pace to date.
- United States is increased 30,000 tons to 500,000 based on
stronger-than-expected medium grain imports.
- Bangladesh is raised 100,000 tons to 600,000 based on
stronger-than-anticipated imports, mainly from India, over the first half of
- North Korea is up 200,000 tons to 500,000 with increased food aid
donations from Japan, Russia, and South Korea.
- Nigeria drops 100,000 tons to 1.3 million as a result of the slow
import pace to date.
- Philippines is increased 100,000 tons to 1.0 million based on
current purchases from the National Food Authority (NFA). NFA recently
announced it would not purchase rice for the remainder of the year.
- Turkey is cut 50,000 tons to 150,000 because of the slow pace to
date due to continued restrictions on imports. In August 2003, the Turkish
Ministry of Agriculture stopped issuing import licenses for rice due to
large domestic supplies. In April 2004, the government replaced the outright
ban on imports with an absorption agreement, which requires importers to
purchase domestic rice in exchange for an import license for an equal
Return to Table of
Last modified: Thursday, November 13, 2003