WORLD MARKETS AND TRADE:

COMMENTARY AND CURRENT DATA

Global production in 2007/08 is projected at 421 million tons (milled basis), up fractionally, with larger crops forecasted for Pakistan, China, Bangladesh, and Thailand. Global consumption continues to outpace production and is expected to grow 5.5 million tons to 424 million. Consequently, ending stocks are expected to continue their downward trajectory, dropping almost 4 million tons to 72 million. Although India is the main reason, stocks in the rest of the world are also forecast to decline, albeit at a slower rate.

Global trade is projected is virtually unchanged. Indonesia is expected to drive world imports again as a result of strong demand and low stocks. In other markets, less import demand from Bangladesh and Malaysia is offset by higher imports by the Philippines, Brazil, and China.

On the supplier side, India’s exports are expected to be down as a result of tighter supplies and high domestic food grain prices. Vietnam’s exports are also expected to be down. However, larger exports by Thailand, Egypt, Pakistan, and Uruguay are supported by increased production and strong world prices. The United States is expected to lose ground in export markets due to tight supplies and reduced price competitiveness.

International: Thai 100B is currently quoted at $324 per ton, FOB, unchanged from last month as good production offsets strong demand and a relatively strong currency. Nominal prices in Vietnam are down $4 from last month. Viet 5% is currently quoted at $300 per ton, FOB. Prices for India and Pakistan for lower grades remain strong. In the case of India, strong demand, both domestically and for export, have helped support prices.

Domestic: U.S. prices continue to soften month to month, with U.S. #2/4 long grain milled rice quoted at $412 per ton, FOB, down $5. The spread between comparable qualities of Thai and U.S. rice continues to narrow and is now at $88 per ton. Prices for U.S. #1/4 medium grain milled rice from California are currently quoted at $525 per ton, FOB, down $10 from last month.

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Last modified: Friday, May 11, 2007