Posted on August, 22, 2024 at 09:12 pm
Despite a cut in the US Department of Agriculture's (USDA) projection for world rice production this year, the crop is still set to be a record and prices have come off accordingly.
In its Rice Outlook report, published on Aug. 14, the USDA’s Economic Research Service (ERS) said that the department has cut its estimate for world 2024-25 rice production by 464,000 tonnes to 527.7 million, “still a record.”
“Production forecasts are lowered for Vietnam, the United States, and Ukraine, but raised for Russia and Kazakhstan,” the US experts said. “Global domestic and residual use in 2024-25 is projected at a record 527.0 million tonnes, down fractionally from the previous forecast.”
Trade in rice in 2024 is forecast at 55.2 million tonnes, up 112,000 tonnes from the previous forecast, with export forecasts raised for Thailand and the United States, the ERS said.
“Over the past month, quotes for trading prices for most grades of regular (neither parboiled nor aromatic) whole-grain milled rice from Thailand decreased 1% to 2%,” the ERS said. “Price quotes for 5% brokens from Vietnam increased slightly over the past month for both the earlier harvested winter-spring crop and summer-autumn crop that is currently being harvested.
“Except for Argentina, price quotes from South American exporters increased over the past month. US trading prices for long-grain and medium-grain milled rice were unchanged over the past month, although rough-rice prices continued to decline for both southern long-grain and California medium- and short-grain.”
The US Rice Producers Association in its Rice Advocate publication of Aug. 16, pointing to the reduction in the USDA’s figure for supplies, pointed out that “despite this drop, we are still up 14% compared to last year, which has been the plan because of the increased crop size.”
“World Consumption dropped slightly based on figures coming out of Vietnam, the Philippines, and Kenya,” it said. “The global trade drop is because of Brazil not having any rice, Vietnam slowing some, and of course, India.”
USDA reported that over the past month, US prices have dropped from the $790 (per tonne) range it has been sitting at since March, down to $770.
“This is despite demand from Latin America, but overweighted by the expectations of the larger crop,” the association said. “Per the report, Uruguay quotes dropped to $803 per tonne as purchases by Brazil and the EU declined.”
The International Grains Council’s (IGC) take on the market, outlined in its Aug. 15 Grain Market Report, was that average international rice prices “were little changed m/m (month-on-month) amid offsetting adjustments at key origins.”
“In Thailand, white and parboiled quotations softened slightly on generally weak buying interest, while 5% broken values in Vietnam advanced by $14, to $563 fob (Ho Chi Minh), following fresh sales to Indonesia and the Philippines,” it said. “Elsewhere, new crop pressure weighed in Pakistan, while parboiled prices in India retreated on subdued demand from West Africa.
In the August 2024 issue of the FAO Rice Price Update, the Food and Agriculture Organization (FAO) said that world average rice prices were down 2.4% in July compared to June, at a 12-month low. Indica quotations were 2.9% below June levels.
“Quiet trading activities also lowered Japonica prices by 2.1% month-on-month, while aromatic quotations were broadly steady,” it said. “By contrast, glutinous prices edged up 0.6% above their June levels, but with increases confined to Thailand, where thinning availabilities lent some support to quotations.”
Source: World Grain