Despite weather problems in China and Pakistan, global crop prospects remain excellent.  Record world production is expected to not only meet rising demand but also maintain global stocks at the highest level since 2004.   

PRICES 

Though quotes from all origins are up somewhat from last month, Vietnam’s increase is the most dramatic.  With 2010 contracts already at a record 6.2 million tons, Vietnam raised the minimum export price of 5% broken to $450 per ton FOB, essentially halting new sales and, for the first time, pushing above higher-quality U.S. #2/4 quotes ($445 per ton FOB).  Vietnamese quotes are now only $30 below Thai 100B quotes, a stark departure from the $120 spread just 2 months ago.  As sales stall in Vietnam, Thai sales are expected to increase as the government finally releases intervention stocks.  U.S. long-grain sales are also expected to pick up on new-found competitiveness and a record crop.  By contrast, the medium-grain trade is somewhat on hold as the California crop has yet to be harvested. In addition, many tenders in major markets have yet to be announced.   

TRADE CHANGES for 2011 

Pakistan’s exports are slashed 750,000 tons to 2.9 million as floods have reduced the crop and damaged infrastructure. 

Afghanistan’s imports are reduced 100,000 tons to 200,000, as Pakistan is by far the largest supplier due to proximity and relative prices.   

Iran’s imports are cut 300,000 tons to 1.2 million on the expectation that imports from Pakistan will fall. 

TRADE CHANGES for 2010 

Thailand’s exports are down 500,000 tons to 9.0 million because the government stock release is happening much later in the year than originally anticipated.   

Vietnam’s exports are bumped 450,000 tons to a record 6.2 million on contracts to date.  By contrast, imports are dropped 100,000 tons to 400,000 on a slowdown of border trade with Cambodia.   

Indonesia’s imports are doubled to 500,000 tons as relatively high domestic prices have caused a surge in trade with neighboring countries.   

Iran’s imports are dropped 150,000 tons to 1.2 million on the pace of shipments.