USDA U.S. Department of Agriculture - December 23, 2002
Rice Situation and Outlook Yearbook. Market and Trade Economics
Division, Economic Research Service, U.S. Department of
Agriculture, November 2002, RCS-2002.
Contents
Summary
U.S. Outlook for 2002/03
Bumper Crop, Record Supplies Projected for 2002/03
U.S. 2002/03 Rice Exports Projected at Record 100 Million
Hundredweight U.S. Season-Average Farm Price Projected Lowest
Since 1986/87
Recap of 2001/02 U.S. Rice Market
U.S. Rice Prices Drop in Face of Record Production and Supplies
International Outlook for 2002/03
Global Prices Show Little Strength Despite Larger Trade
Thailand, Vietnam, and China Projected To Ship More Rice in 2003
Global Import Demand in 2003 Projected Second Highest On Record
Special Article:
Chinas Japonica Rice Market: Growth and Competitiveness
Report Coordinator
Nathan Childs (202) 694-5292
Economic Contributors
Nathan Childs (202) 694-5292
Jim Hansen
Managing Editor
Martha R. Evans (202) 694-5118
Layout, Text Design, and Graphics
Wynnice Pointer-Napper (202) 694-5130
Approved by the World Agricultural Outlook Board. Summary
released November 25, 2002. The Rice Outlook and the text of the
Rice Yearbook may be accessed electronically. For details, call
ERS Customer Service (202) 694-5050.
Rice Conversions
1 cwt = 100 pounds = 2.22 bushels = .0453 metric ton
1 metric ton = 2,204.6 pounds = 22.046 cwt = 48.992 bushels
1 cwt rough rice = .032 metric ton milled
1 metric ton milled = 31 cwt rough
Record Supplies, Weaker Prices
Projected for 2002/03 U.S. Rice Market
Total U.S. rice supplies for 2002/03 (August-July) are projected at
a record 264 million hundredweight (cwt) (rough basis), up almost 4
percent from a year earlier. A 37-percent increase in beginning
stocks to 39 million cwt more than offset a fractional drop in
production to 212 million cwt--still the second highest on record--
and a 1-percent cut in imports to 13 million cwt. This is the
second consecutive year of record total rice supplies, primarily
due to bumper crops in both 2001 and 2002.
U.S. rice plantings for 2002/03 are estimated at more than 3.2
million acres, down 3 percent from a year earlier. All of the
acreage decline is in the South. A bearish price outlook--as well
as heavy rains at plantings in parts of the Delta--are behind the
decline. The average yield is projected at a record 6,611 pounds
per acre, up 182 pounds from a year earlier. Increased plantings of
new, higher yielding southern long grain varieties are behind this
years third consecutive record yield.
Long grain accounts for all of this years production decline. Long
grain production in 2002/03 is projected at 157.5 million cwt, down
5 percent from a year earliers record, a result of weaker
plantings. Nearly all U.S. long grain rice is produced in the
South. In contrast, combined medium/short grain production is
projected to increase 14 percent to 54.5 million cwt, primarily a
result of larger plantings. At planting, medium grain prices were
slightly higher than a year earlier and stronger than prices for
long grain, a major factor behind expanded plantings of
medium/short grain acreage this year. Last year, rice production in
California--where more than two-thirds of the U.S. medium/short
grain crop is grown--was down 12 percent from a year earlier, a
main factor driving the higher medium grain prices.
In the South, acreage is typically shifted among classes of rice--
i.e., long, medium, and short--based on expected returns. Higher
field yields for long-grain rice made long grain more profitable to
many southern producers, despite higher prices for medium-grain
rice.
Total use is projected at a record 225 million cwt in 2002/03, up 4
percent from a year earlier. Exports account for the majority of
this years higher use. Total U.S. rice exports are projected at a
record 100 million cwt, 6 percent above a year earlier. Competitive
prices, record supplies, and expanded global trade are behind the
robust U.S. export forecast. Rough rice exports for 2002/03 are
projected at a record 35 million cwt, up 10 percent from a year
earliers previous high. Combined milled and brown rice exports (on
a rough basis) are projected at 65 million cwt, up 4 percent from
2001/02 and the largest since 1996/97. Total domestic use is
projected at a record 125 million cwt, up almost 3 percent from a
year earlier.
Total ending stocks for 2002/03 are projected at 39 million cwt,
unchanged from a year earlier and the largest since 1992/93. The
stocks-to-use ratio is projected at 17.3 percent, down from a year
earliers 18.1 percent. About 4 million cwt of the 2002 U.S. rice
crop has been forfeited to the U.S. Department of Agricultures
Commodity Credit Corporation (CCC), the first significant
forfeiture in 8 years. Of the 4 million cwt forfeited, 1 to 2
million will likely be taken over by the CCC. The rest was sold
earlier this year at or below market prices, a factor contributing
to lower prices this year.
U.S. Long Grain Supplies
Projected To Rise 4 Percent to Record
U.S. long grain supplies are projected at a record 193.5 million
cwt, up 4 percent from a year earlier. A 130-percent increase in
beginning stocks and record imports more than offset the smaller
crop. At 26.8 million cwt, beginning stocks of long-grain rice are
the largest since 1987/88. Long grain imports are projected at
nearly 9.3 million cwt, fractionally above a year earlier.
Total long grain use is projected at a record 167.7 million cwt, an
increase of more than 5 percent from a year earlier. Domestic use
is projected at a record 88.7 million cwt, more than 3 percent
above 2001/02. Long grain exports are projected to climb more than
7 percent to 79 million cwt, second only to the 1994/95 record of
81.4 million. Long grain ending stocks are projected to drop 1
million cwt to 25.8 million cwt in 2002/03. The resulting stocks-
to-use ratio is 15.4 percent, down from 16.8 a year earlier.
Total supplies of combined medium/short grain rice are projected at
68.9 million cwt, nearly 3 percent above a year earlier. A 14-
percent increase in production more than offset a drop in beginning
stocks and weaker imports. Imports, projected at 3.8 million cwt,
are down 7 percent from a year earliers record.
Total medium/short grain use is projected to increase nearly 2
percent to 57.3 million cwt. Both domestic use and exports are
projected higher in 2002/03. Medium/short grain domestic use is
projected to increase more than 1 percent to 36.3 million cwt.
Exports are projected to expand 2 percent to 21 million cwt. The
net result is a 1-million cwt increase in ending stocks to 11.6
million cwt. The stocks-to-use ratio is projected to rise 20.3
percent, up from 18.9 percent a year earlier.
The 2002/03 season-average farm price (SAFP) is projected at $3.70
to $4.00 per cwt, down from $4.17 a year earlier and the lowest
since 1986/87. This is the sixth consecutive year of declining SAFP
in the United States. In October 2002, quoted prices for long-grain
rice were the lowest in more than 15 years, a result of record U.S.
supplies and continued weak international prices. For medium/short
grain rice, U.S. price quotes began to drop in July in anticipation
of a larger U.S. harvest this year. By mid-November, medium grain
price quotes were slightly lower than a year earlier but still
higher than quotes in 2000/01 when California produced a record
crop.
U.S. prices for long grain milled rice are well below a year
earlier. In mid-November, prices for high-quality southern long
grain (U.S. No. 2, 4-percent brokens, f.o.b mill in Houston) were
quoted at $198 per ton, down $22 from a year earlier. Prices were
actually reported as low as $165 in June, the lowest in 15 years.
The recent price strength was primarily due to tight milling
capacity in the South during the summer and early fall. Prices for
California medium grain milled rice (U.S. No. 1, 4-percent brokens,
f.o.b. mill in Sacramento) have been quoted at $265 per ton since
mid-April, down $20 from a year earlier.
Global Rice Prices Show Little Strength,
Despite Smaller Supplies & Stronger Trade
Since July 2002, global trading prices have dropped 5 to 10
percent, despite contracting supplies and expanding trade. Prices
for Thailands 100 percent grade B have been quoted at $188-$197
per ton since early August, quite low by historical comparison.
From April through July 2002, prices were reported at $200-$210 per
ton. In November 2001, trading prices began to rise due to
government intervention purchases by Thailand. By July 2002, prices
began to drop due to record subsidized exports from India. India
began subsidizing exports in the spring of 2001. Global trading
prices have shown little movement since early fall. During much of
2001, global trading prices had been the lowest in three decades,
a result of bumper crops in most major exporting countries, and,
except for parts of the Middle East, no significant production
problems in a major importing country.
Global rice production in 2002/03 is projected at 381.8 million
tons (milled basis) down 4 percent from a year earlier and the
smallest since 1996/97. This is the third consecutive year of
declining global rice production. Despite the smaller crop, only
modest price strengthening is expected in 2002/03--a result of
reduced export subsidies from India. Since this forecast assumes
normal weather for the remainder of the 2002/03 market year, a
major weather problem could alter this projection. Global ending
stocks are projected at 106.1 million tons, down 20 percent from a
year earlier and the lowest since 1987/88.
India and China--both major exporters--account for the bulk of this
years expected reduction in global rice production. However, both
countries are expected to have plenty of supplies for both their
domestic market and to remain major exporters in 2002 and 2003.
Other major exporters--Thailand, Vietnam, and the United States--
are expected to produce record or near-record crops in 2002/03.
Drought reduced Pakistans 2001/02 and 2002/03 crops, limiting
exports. Most major importers are expecting to harvest bumper crops
in 2002/03.
For 2003, global rice trade is projected at 26.6 million tons
(milled basis), fractionally above a year earlier and second only
to the 1998 record of 27.7 million tons. In 2002, global rice trade
jumped 9 percent. Indonesia, Iraq, and Iran account for most of the
expansion in 2002 imports. In 2003, Thailand, Vietnam, Burma,
China, and the United States are all expected to ship more rice
than this year, while India and Pakistan are expected to export
less.
U.S. Outlook for 2002/03
Bumper Crop, Record Supplies Projected for 2002/03
U.S. rice supplies are projected to increase almost 4 percent to
a record 264 million hundredweight (cwt) in 2002/03, the result
of a huge carryin, bumper harvest, and near-record imports. At
212 million cwt, production is fractionally below a year
earliers record as smaller plantings were nearly offset by a
record yield. Long grain supplies, projected at a record 193.5
million cwt, are up 4 percent from a year earlier. Combined
medium/short grain supplies are projected to increase 3 percent
to 68.9 million cwt.
U.S. Rice Production Drops Fractionally
On Smaller Plantings
Based on estimates by the U.S. Department of Agricultures (USDA)
National Agricultural Statistics Service (NASS) in early
November, the 2002/03 U.S. rice crop is forecast at 212 million
hundredweight (cwt) (rough basis), down fractionally from a year
earlier and the second largest on record. A 3-percent cut in
plantings to 3.23 million acres was almost offset by a higher
yield. The average yield, projected at a record 6,611 pounds per
acre, is up 182 pounds from a year earlier. This is the third
consecutive year of a record U.S. average yield and fourth
consecutive year of an increasing average.
NASS reports annual rice production grown in six States:
Arkansas, California, Louisiana, Mississippi, Missouri, and
Texas. These six States account for about 99 percent of total
U.S. rice production. Rice production in other States is neither
reported by USDAs NASS nor included in the U.S. total. Florida
accounts for the bulk of unreported production, with Oklahoma,
Tennessee, Illinois, South Carolina, and Kentucky typically
producing smaller amounts.
Long grain accounts for all of this years decline in rice
production. U.S. long grain production is projected at 157.5
million cwt, down 5 percent from a year earliers record. In
contrast, medium grain production is projected at 52.6 million
cwt, up 14 percent from a year earlier. Short grain production,
accounting for less than 1 percent of the total U.S. crop, is
projected at almost 1.9 million cwt, up 19 percent from 2001/02.
California produces the bulk of U.S. short grain rice.
Expectations of a large carryover by season-end--plus excessive
rain in parts of the Delta--were major factors behind smaller
long grain acreage this year. In 2001/02, U.S. long grain
supplies jumped 22 percent, a result of a record crop. In
contrast, at planting, medium grain price quotes had risen nearly
50 percent since the start of the 2001/02 market year, a major
reason for both larger plantings in California--which grows
mostly medium grain--and shifts to medium grain acreage from long
grain in the South.
U.S. Average Yield Estimated
At Record 6,611 Pounds Per Acre
In early November, NASS forecasted average field yields for
2002/03 at a record 6,611 pounds per acre, up nearly 4 percent
from a year earlier. Generally favorable weather across most of
the South during critical growing months; expanded plantings of
newer, higher yielding long grain varieties; and a shift in
acreage to the high yielding California rice from the lower
yielding southern rice are behind the record yield. This is the
third consecutive year of a record average yield. Annual yield
growth has averaged 4 percent since 1999/2000 after being almost
stagnant from 1988/89 to 1998/99.
Field yields are projected higher this year for all reporting
States except Louisiana, with record yields projected for all
southern reporting States. The Arkansas yield is projected at
6,450 pounds per acre, up 200 pounds from last year; California
at 8,300 pounds, up 130; Mississippi at 6,600 pounds, up 100;
Missouri at 6,000 pounds, up 50; and Texas at 7,000 pounds, up
300. Louisianas yield is projected at 5,500 pounds, unchanged
from a year earliers record.
Despite an increase of almost 2 percent this year, rice yields in
California remain below the 8,500 pounds per acre record achieved
in 1991, 1992, and 1994. In fact, except for 1997, 2001, and 2002
average rice yields in California have been less than 8,000
pounds since 1995. Environmental regulations, adverse weather,
and varieties grown are likely factors behind Californias lower
yields.
Rice Crops Projected Smaller
In All Southern Growing States
Rice acreage is smaller this year in all reporting States except
California. Arkansas, the largest rice producing State, accounts
for the bulk of this years acreage decline. Planted area dropped
115,000 acres to 1.52 million. Declines in other States were much
smaller. Missouris rice plantings are estimated at 201,000
acres, a drop of 10,000 from 2001/02 but still the second highest
on record. Rice acreage in Missouri has substantially increased
over the past decade. Mississippis rice acreage is estimated at
245,000 acres, down 10,000 from a year earlier. Heavy rains early
in the planting season likely reduced rice plantings in these
three Mississippi Delta rice-growing States.
Louisianas rice acreage is estimated at 540,000 acres, down
8,000 from a year earlier. In Texas, rice area is estimated at
206,000 acres, down 11,000 from a year earlier and well below the
1968 record of 599,000 harvested acres. This is the smallest rice
plantings in Texas since the mid-1930s. Rice acreage in Texas has
declined sharply since the early 1980s. Higher production costs
than other southern States, lack of an economically viable
rotation crop for many producers, and weather problems such as
hurricanes account for the long-term decline in rice plantings in
Texas. In contrast to the South, planted area in California is
estimated at 523,000 acres, a 50,000-acre increase from a year
earlier but still below the 1981 record of 600,000 acres.
Total U.S. rice production is projected to decline about a
million cwt in 2002, with a larger California crop nearly
offsetting weaker production in all southern growing States.
Reduced plantings account for the smaller crops in the South.
Arkansas reports the largest reduction, with 2002 production
projected to drop more than 4 percent to 97.1 million cwt, still
the second highest on record. Crop reductions in other States are
much smaller. Louisianas rice crop is projected at 29.4 million
cwt, down 2 percent from a year earlier. In Missouri, rice
production is projected at 11.8 million cwt, a drop of 4 percent
from the 2001/02 record. Mississippis production is forecast to
decline nearly 3 percent to 16 million cwt. At 14.4 million cwt,
Texas rice production is about 1 percent below a year earlier.
In contrast, Californias 2002 rice crop is estimated at 43.2
million cwt, an increase of 12 percent from a year earlier.
Greater plantings and a higher yield are behind the larger crop.
Total U.S. Supplies Projected
At Record 264 Million Cwt
Total U.S. rice supplies in 2002/03 are projected at a record 264
million cwt, up almost 4 percent from a year earlier and the
second consecutive year of record supplies. A 37-percent increase
in beginning stocks more than offset a slight drop in imports and
the smaller crop. Based on data from the NASS August Rice Stocks
report, beginning stocks for 2002/03 are estimated at 39 million
cwt, up 10.5 million cwt from a year earlier and the largest
since 1993/94.
U.S. rice imports for 2002/03 are projected at 13 million cwt,
down fractionally from a year earliers record. In 2001/02, U.S.
rice imports jumped 22 percent to 13.2 million cwt, with large
shipments of medium grain rice to Puerto Rico from Australia
accounting for most of the increase. Australia shipped smaller
amounts to Puerto Rico early in the 2002/03 market year.
Australia has not typically supplied rice to the United States.
Excluding the Australian shipments, nearly all U.S. rice imports
are specific aromatic varieties not currently grown in the United
States. Most are long grain varieties. U.S. rice imports have
increased sharply over the past two decades. About 80 percent of
U.S. rice imports typically come from Thailand--mostly jasmine
rice--and the bulk of the remainder is basmati from India and
Pakistan. Italy also exports small quantities of arborio rice to
the United States, with smaller quantities often imported from
Vietnam, China, and Egypt.
Long grain--the dominant class of rice grown in the United
States--accounts for the bulk of the increase in total rice
supplies this year. Total long grain supplies are projected at a
record 193.5 million cwt, up 4 percent from a year earlier. A
huge carryin and record imports more than offset the smaller
crop. Data from the August 2002 Rice Stocks report indicated long
grain stocks at the beginning of the 2002/03 market year at 26.8
million cwt, a 130-percent increase from a year earlier and the
largest since 1987/88.
For medium/short grain rice, supplies are projected at 68.9
million cwt, up nearly 3 percent from a year earlier. This years
larger crop more than offset tighter beginning stocks and a
decline in imports. Data from the August 2002 Rice Stocks report
indicate beginning stocks of medium/short grain rice at 10.7
million cwt, down nearly 32 percent from a year earlier. A 12-
percent drop in Californias rice production in 2001/02 is the
main factor behind this years smaller carryin. Imports of
medium/short grain rice are projected to drop 7 percent to 3.8
million cwt, second only to a year earliers record.
U.S. 2002/03 Rice Exports Projected at Record 100 Million Cwt
Total rice use in 2002/03 is projected to increase more than 4
percent from a year earlier to a record 225 million cwt, with
both domestic use and exports the highest on record. Total
domestic use is projected to increase nearly 3 percent to 125
million cwt, while U.S. exports are expected to climb 6 percent
to 100 million. Long grain accounts for the bulk of the expansion
in both domestic use and exports. Total long grain use is
projected at a record 167.7 million cwt, up more than 5 percent
from 2001/02. Combined medium/short grain total use is projected
to be slightly higher this year. Ending stocks of total rice are
projected at 39 million cwt, the largest since 1993/94.
Total Rice Use in 2002/03
Projected at Record 225 Million Cwt
Total rice use--domestic and residual plus exports--in 2002/03 is
projected at a record 225 million cwt, up more than 4 percent
from a year earlier. Both domestic use--including residual, or
unreported losses in transporting and marketing--and exports are
projected to be record highs in 2002/03. Exports account for the
majority of the increase in total rice use this year. Total U.S.
rice exports are projected at a record 100 million cwt, more than
6 percent above a year earlier and 1.2 million cwt above the
1994/95 previous high.
Total domestic utilization (food, industrial, and residual plus
seed use) is projected at a record 125 million cwt, up almost 3
percent from 2001/02. Food, industrial, and residual is projected
at a record 121 million cwt, an increase of nearly 3 percent.
While rice consumption in the United States has increased
steadily since the late 1970s, the rate of growth has slowed
since the mid-1990s. During the 1980s and early 1990s growth in
total U.S. rice consumption (excluding shipments to U.S.
territories) averaged more than 4 percent a year. Since 1995/96,
growth in U.S. rice consumption has averaged 2.5 percent.
In February, USDAs 2002 long-term baseline projection forecasted
a growth rate of a little more than 2 percent a year for the next
decade. While less than half the rate achieved a decade ago,
growth is still more than double the rate of population growth.
Food use accounts for most of the expansion in U.S. rice
consumption over the past two-and-a-half decades. Strong growth
in U.S. food use has been largely due to a big increase in
immigration from Asia, Latin America, and Africa since the late
1970s. These ethnic groups typically have much higher per capita
rice consumption than the United States as a whole. In addition,
greater emphasis on healthy lifestyles, convenience, and
versatility have encouraged greater U.S. rice consumption.
Per capita rice consumption--including direct food use, processed
foods, pet foods, and beer--has nearly doubled since the early
1980s and is currently projected at about 27 pounds. Since
1990/91, per capita consumption has grown almost a half-a-pound a
year, down from a pound a year in the 1980s.
U.S. Rice Exports Projected
To Climb To Record 100 Million Cwt
U.S. rice exports in 2002/03 are projected to increase more than
6 percent to a record 100 million cwt (rough basis). Competitive
U.S. prices, huge U.S. supplies, and greater world trade are
behind the robust export forecast. Exports are projected to be
1.2 million cwt larger than the previous high reported in
1994/95. Both rough and milled rice exports are projected to
increase this year, with rough rice exports projected to account
for the bulk of the increase in total exports this year.
U.S. rough rice exports for 2002/03 are projected at 35 million
cwt, up 10 percent from a year earlier and the second consecutive
year of record U.S. rough rice exports. In 2001/02, record
purchases by Mexico and Central America were responsible for a
39-percent jump in U.S. rough exports to 31.7 million cwt. This
year, continued strong shipments to Mexico and Central America,
plus large purchases by Cuba and Brazil are behind the record
rough rice export projection. Recent legislation allowing U.S.
sales of food and medicine to Cuba is behind this years robust
sales to Cuba. Brazil sometimes buys large amounts of U.S. rice
in years when regional supplies are inadequate for Brazils large
domestic market.
Southern long grain accounts for the bulk of U.S. rough rice
exports, with most of this rice going to Latin America. Turkey is
the only other large market for U.S. rice. Turkey typically
imports California medium grain rice but will take southern
medium grain if California supplies are tight. Turkeys purchases
of U.S. rice--mostly rough rice--have been relatively small
compared with previous years. Last November, Turkey placed a
temporary ban on imports of U.S. rice, but sales have resumed.
The European Union typically imports much smaller amounts of U.S.
rough rice, mostly long grain.
The United States is the only major rice exporter that allows
rough rice exports, and rough rice has become a larger share of
U.S. exports, accounting for more than 30 percent in recent
years. U.S. rough rice exports have expanded substantially since
1990/91. None of the large Asian exporting countries allows rough
rice exports. However, Argentina, Uruguay, and Guyana ship some
rough rice within Latin America, and Australia has shipped rough
rice to Turkey.
Combined milled and brown rice exports (on a rough basis) are
projected at 65 million cwt in 2002/03, up nearly 4 percent from
a year earlier and the largest since 1996/97. Stronger global
rice trade in 2002 and 2003 plus competitive U.S. prices are
behind the higher milled rice export forecast. The price
difference over similar grades of rice from Thailand--a major
competitor of the United States in South Africa and parts of the
Middle East--has declined substantially in recent years. From
almost $90 per ton in 2000/01, the difference dropped to less
than $40 in 2001/02 and has averaged just $15 per ton since
August 2002.
Long Grain Accounts for Bulk of the Rise
In Domestic Use and Exports
Long grain accounts for the bulk of the projected increase in
total rice use in 2002/03. Total long grain use is projected at a
record 167.7 million cwt, up more than 5 percent from a year
earlier. Both domestic use and exports are projected higher this
year.
Total domestic use (including residual) of long grain rice is
projected at a record 88.7 million cwt, up more than 3 percent
from a year earlier. Long grain exports are projected to increase
more than 7 percent to 79 million cwt, the largest since the
1994/95 record 81.2 million cwt. Exports of both rough and milled
long grain rice are expected to increase in 2002/03. Competitive
prices, record U.S. supplies, and stronger global demand are
behind expectations of increased U.S. long grain exports in
2002/03.
Total use of combined medium/short grain rice is projected at
57.3 million cwt, up less than 2 percent from a year earlier but
well below the 1993/94 record of 61.3 million. Both domestic use,
including residual, and exports are projected to increase in
2002/03. Medium/short grain domestic use is projected at 36.3
million cwt, up slightly more than 1 percent from a year earlier.
Medium/short grain exports in 2002/03 are projected to increase 2
percent to 21 million cwt, the largest since 1987/88. Japan,
Turkey, and Jordan have been top markets for U.S. medium/short
grain rice at least since the mid-1990s. Three other buyers are
important this year as well. First, South Korea--which barred
rice imports more than two decades ago--has been a regular buyer
of U.S. rice since 2001/02. Second, Taiwan has purchased U.S.
medium/short grain rice from the United States, the first
purchases in several decades. And finally, Uzbekistan has
purchased U.S. medium/short rice under U.S. food aid programs in
both 2001/02 and 2002/03.
Japan is the largest global importer of medium/short grain rice
and the largest market for U.S. medium/short grain rice as well.
In fact, more than half of Californias annual rice exports
typically go to Japan. The United States supplies about half of
Japans annual rice imports. China, Australia, and Thailand
supply most of the rest. Virtually all of Japans rice imports
are purchased under the World Trade Organizations (WTO) minimum
access requirements. Extremely high tariffs on any over-quota
rice imports virtually preclude purchases beyond the minimum
access requirements. Japans WTO imports are not scheduled to
increase until another WTO agreement is reached.
Like Japan, both South Koreas and Taiwans rice imports are
solely the result of minimum access agreements under the WTO.
South Koreas minimum access imports are scheduled to increase
annually from 1995 through 2004. As a requirement for joining the
WTO, Taiwan agreed to a minimum access import level for rice in
2002. Access after this year for Taiwan is currently being
debated.
U.S. Ending Stocks Projected
To Remain Largest Since 1992/93
U.S. ending stocks of all rice for 2002/03 are projected at 39
million cwt, virtually unchanged from a year earlier and the
largest since 1992/93. An almost 4-percent increase in total
supplies virtually offset record total use. The resulting stocks-
to-use ratio is projected at 17.3 percent, down from a year
earliers 18.1 percent.
The ending stocks situation is expected to be somewhat different
by class of rice. For long grain rice, ending stocks are
projected to drop 4 percent to 25.8 million cwt, still the second
largest since 1987/88. The long grain stocks-to-use ratio is
projected at 15.4 percent, down from a year earliers 16.8
percent but still the second highest in a decade. Assuming normal
weather worldwide, U.S. long grain prices are expected to remain
under severe price pressure for at least the remainder of the
2002/03 market year.
In contrast, medium/short grain ending stocks for 2002/03 are
projected to increase 9 percent to 11.6 million cwt. A 3-percent
increase in medium/short grain supplies more than offset a slight
rise in total use. The resulting medium/short grain stocks-to-use
ratio is projected at 20.3 percent, up from 18.9 percent a year
earlier.
U.S. Season-Average Farm Price Projected Lowest Since 1986/87
The U.S. season-average farm price for 2002/03 is projected at
$3.70 to $4.00 per cwt, down from $4.17 a year earlier and the
lowest since 1986/87. Record supplies of rice at home, continued
low international prices, and sales of forfeited rice by USDAs
Commodity Credit Corporation at or below market prices are behind
the bearish price outlook. Without a major weather disturbance,
there is little reason to expect any significant strengthening of
world prices. U.S. producers are expected to realize marketing
loan benefits for the remainder of the 2002/03 market year. Total
U.S. food aid shipments in fiscal 2002 are estimated to be
372,000 up from 231,000 tons a year earlier.
Season-Average Farm Price
Projected at $3.70 to $4.00 Per Cwt
The 2002/03 season-average farm price is projected at $3.70 to
$4.00 per cwt, down from $4.17 a year earlier and the lowest
since 1986/87. This is the 6th year of declining season-average
farm prices for U.S. rice. Record supplies of rice at home and
continued weak prices in the international rice market are behind
the bearish price outlook.
Average U.S. monthly cash prices for rough rice have sharply
declined since early 1999. In August 2002, USDAs average cash
price was estimated at $3.72 per cwt, the lowest since July 1987.
Prices have rebound 10-15 cents per cwt, with the mid-November
price reported at $3.86 per cwt. Even with the recent up-tick in
prices, U.S. monthly cash prices have been below a year earlier
every month since November 1998.
Price movements by class of rice are somewhat different. Quoted
prices for long grain rice have steadily declined since early
2001, primarily due to two consecutive years of record U.S.
supplies of long grain rice and extremely low prices for long
grain rice in international markets.
In mid-November, long grain rough rice prices were quoted at
around $3.50 per cwt in the Delta and up to 25 cents higher on
the Gulf Coast. Although price quotes in the Delta are up
slightly from last month, on average, southern long grain prices
are the lowest in more than 15 years. In fact, there has been no
significant price strength for southern long grain rice in more
than a year.
For California medium grain rice, farm price quotes have dropped
since May on expectations of a larger crop in 2002. In mid-
November, California medium grain prices were calculated at $4.90
per cwt, up about 20 cents from September and October. Recent
sales to South Korea and Taiwan are behind the slight increase.
Despite this months slight increase, prices are down more than a
dollar from May. In 2001/02, California rice production dropped
nearly 12 percent from a year earliers record, boosting prices
that year. Because the bulk of Californias rough rice is sold
under some form of pooling method, rough rice prices are
determined by the milled rice price.
In the South, medium grain prices were quoted around $5.00 per
cwt in mid-November, up from less than $4.00 in August. Despite
higher prices for medium than long grain rice at planting,
southern producers boosted medium grain plantings 21,000 acres to
177,000, well below 309,000 acres in 2000.
Marketing Loan Gains in 2001/02
Averaged $3.21 Per Cwt
U.S. producers are eligible for marketing loan benefits when
foreign prices (represented by USDAs weekly adjusted world
price) fall below the loan rate for rough rice. Loan rates vary
by class of rice--long, medium, and short grain--with an all-rice
average loan rate fixed at $6.50 per cwt. Since the spring of
1999 world prices have remained below the loan rate, making U.S.
rice producers eligible for marketing loan benefits.
From August 1995 until late March 1999, the adjusted world price
exceeded the loan rate, thus marketing loan payments were not
available. Payment rates were less than $1 per cwt from the
spring of 1999 until the start of the 1999/2000 market year.
Declining world prices caused payment rates to rise during
1999/2000 and by mid-March 2000 payment rates exceeded $2 per cwt
for all three classes of rice--long, medium, and short. Payment
rates continued to rise in 2000/01 as the adjusted world price
declined.
From May through July 2001 the adjusted world price for all three
classes of rice averaged $2.82 per cwt, the lowest on record. The
average payment rate during these 3 months by class was $3.68 for
long grain, $3.57 for medium, and $3.55 for short grain. This is
the largest payment rate for long grain rice since the summer of
1987 and the largest payment rate on record for medium and short
grain rice. A slight strengthening of the adjusted world price
last fall reduced the payment rate 20 to 25 cents for all three
classes of rice. However, the average payment rate was $3.21 per
cwt for 2001/02.
Through November 2002, the 2002/03 payment rate has averaged
$3.25 per cwt, up a few cents from the 2001/02 average. Without a
major weather disturbance in some part of the globe, little if
any significant increase in the world price is likely, indicating
continued high payment rates at least until the end of the
2002/03 market year.
U.S. Food Aid Shipments for Rice
Increased 65 Percent in FY 2002
Total U.S. food aid shipments in fiscal 2002 (October 2001 to
September 2002) are estimated at 380,317 tons, up almost 150,000
from a year earlier. Food aid accounted for almost 11 percent of
total U.S. rice exports in fiscal 2002, up from less than 8
percent a year earlier. In both the text and tables of this
report, U.S. food aid shipments--reported on a product-weight
basis--are assigned appropriate October-September fiscal years
based on date of purchase, not actual shipment date. In fiscal
2001, total U.S. food aid shipments totaled 230,700 tons, down
from 394,200 a year earlier.
U.S. rice is shipped under four food aid programs: PL 480 (Title
I and Title II), Section 416 (b) surplus removal, Food for
Progress, and Global Food for Education. In fiscal 2002,
shipments under PL 480 Title I (concessional sales) totaled
185,727 tons, up more than 99,500 from a year earlier. Indonesia
accounted for the bulk of the Title I shipments in 2002, taking
90,135 tons. Uzbekistan ranked second with 58,519 tons. The
Philippines accounted for the remainder, purchasing 37,073 tons.
Purchases under PL 480 Title II, or food donations, accounted for
nearly 67,000 tons in fiscal 2002. Indonesia was the largest
recipients of Title II donations. Other major recipients in
fiscal 2002 were: Niger, Burkina Faso, Benin, Nepal, and
Guatemala.
More than 64,000 tons of rice were purchased in fiscal 2002 under
the Section 416 (b) program. Major recipients were North Korea,
the Philippines, and Ukraine. Exports under the Food for Progress
program totaled 38,880 tons, up from 29,090 a year earlier.
Nigeria, Cote dIvoire, and Senegal together accounted for nearly
three-fourths of fiscal 2002 shipments. Finally, shipments under
the Global Food for Education program totaled 24,580 tons,
slightly below a year earlier. Mozambique, Congo, and Nigeria
together accounted for about half the total shipments. Other
recipients under the Global Food for Education program in fiscal
2002 included Gambia, El Salvador, and Ghana.
In fiscal 2001, Title I agreements for rice totaled 86,200 tons,
down 55,800 from a year earlier. Uzbekistan was the largest
recipient, purchasing 51,300 tons. The Philippines accounted for
the remainder, purchasing 34,900 tons in 2001. In addition,
58,100 tons of rice were purchased in fiscal 2001 under PL 480
Title II, down 27,500 tons from a year earlier. Major recipients
of Title II in fiscal 2001 were Indonesia, Guatemala, Benin,
Burkina Faso, Cambodia, Niger, and Senegal.
In fiscal 2001, 30,650 tons were shipped under the Section 416
(b) program, down from more than 147,000 tons purchased for
export under Section 416 (b) in fiscal 2000. Cambodia, Jamaica,
and Nicaragua accounted for all of the shipments in 2001. U.S.
rice exports purchased under the Food for Progress program
totaled 29,090 tons in fiscal 2001, down 2,130 from a year
earlier. Russia was the largest recipient, taking nearly 11,500
tons. Togo, Haiti, Azerbaijan, and Georgia accounted for most of
the remainder. Finally, in fiscal 2001, shipments under the newly
created Global Food for Education program totaled 26,670 tons.
Major recipients included Moldova, Mozambique, Congo-Brazzaville,
El Salvador, Cambodia, and Gambia.
Recap of 2001/02 U.S. Rice Market
U.S. Rice Prices Drop in Face of Record Production and Supplies
An almost 12-percent increase in production--plus record imports
and a larger carryin--boosted total U.S. rice supplies to 254.7
million cwt, the largest to date. Long grain accounted for all of
the supply expansion, combined medium/short grain supplies were
down more than 10 percent, primarily due to an almost 1 percent
cut in Californias 2001/02 harvest. Both domestic use and
exports were higher than a year earlier. Ending stocks rose
almost 37 percent to nearly 39 million cwt, the largest since
1992/93. The season-average farm price for rice dropped almost 26
percent to $4.17 per cwt, the lowest since 1986/87 and fifth
consecutive year of decline.
U.S. Rice Crop Climbs 12 Percent
To Record 213 Million Cwt
The 2001/02 U.S. rice crop is estimated at a record 213 million
cwt, up nearly 12 percent from a year earlier. The record crop is
the result of a 9-percent increase in plantings to 3.34 million
acres and a 2-percent boost in the average yield to a record
6,429 pounds per acre. This was the second consecutive year of a
record yield.
Long grain accounted for all the area expansion. Long grain rice
plantings rose 23 percent to more than 2.71 million acres,
fractionally below the 1999/2000 record. Plantings of medium
grain rice dropped 27 percent to 595,000, the lowest since
1988/89. Medium grain plantings were down in both California--
where more than two-thirds of the U.S. medium grain crop is
grown--and in the South. Plantings of short grain rice--which
accounts for less than 1 percent of U.S. rice production--were
estimated at 26,000 acres, a drop of 10,000 from 2000/01.
California--which produces the bulk of the U.S. short grain crop-
-accounted nearly all of the area decline.
The 2001/02 area expansion was primarily due to higher prices at
planting for long grain rice--a result of a 12-percent drop in
long grain supplies a year earlier--and lack of a better planting
option. Plantings increased in every southern rice-growing State.
In Arkansas, 2001 rice plantings are estimated at a record 1.63
million acres, up 15 percent from a year earlier. At 548,000
acres, Louisianas rice acreage was 13 percent larger than a year
earlier. Mississippis rice plantings, estimated at 255,000
acres, were up 16 percent from 2000/01. In Texas, rice plantings
increased fractionally to 217,000. Despite the increase, Texas
rice acreage is down nearly two-thirds from its 1968 high of
599,000 acres. Rice acreage in Texas has declined substantially
over the past decade, a result of high production costs, lack of
a viable rotation crop for many producers, and more problems with
hurricanes, flooding, and drought than other regions. Missouris
rice area climbed 24 percent to a record 211,000 acres. Rice
acreage in Missouri has expanded substantially since the late
1980s
The national average yield for 2001 is estimated to have been
6,429 pounds per acre, up 148 pounds from 2000 and a record to
date. Yields were higher than a year earlier in all rice growing
States except Texas where yields were flat. Yields in 2001 were
the highest on record in Arkansas, Louisiana, Mississippi,
Missouri, and Texas. In the South, generally favorable weather
conditions across the region and the introduction of new, high
yielding long grain varieties were the main factors behind such
strong yields in 2001.
Arkansas yield of 6,250 pounds per acre was up more than 2
percent from a year earlier and the highest to date. In
Louisiana, average yields climbed 8 percent to a record 5,500
pounds per acre. Mississippis yield jumped 10 percent to 6,500
pounds per acre. The Texas yield is estimated to have been 6,700
pounds per acre, unchanged from a year earlier. At 5,950 pounds
per acre, Missouris 2001 yield was up more than 4 percent from a
year earlier. In California, the average yield rose nearly 3
percent to 8,170 pounds per acre, still below the record 8,500
achieved in 1991, 1992, and 1994. Adverse weather problems,
environmental regulations, and unique characteristics of the
varieties have, at times, contributed to Californias weaker
yields in recent years.
In 2001, year-to-year production changes varied by class. Long
grain production is estimated to have been a record 165.3 million
cwt, up 28 percent from a year earlier. A 23-percent increase in
long grain area plus a record yield accounted for the bumper
crop. In contrast, medium grain production dropped 22 percent
from a year earlier, a result of weaker plantings. The short
grain crop is estimated to have declined more than 38 percent to
1.6 million cwt, also due to smaller plantings. The 2001 short
grain crop was the smallest since 1997.
Rice production increased in 2001 in every reporting State except
California, with Arkansas and Missouri harvesting record crops.
Arkansas accounted for the largest share of the production
increase. Arkansas 2001 crop is estimated at 101.3 million cwt,
up 18 percent from a year earlier, a result of greater plantings
and a record yield. Arkansas is the largest rice growing State,
accounting for more than 45 percent of total U.S. rice
production.
Louisianas 2001 rice crop is up 23 percent--and at 30 million
cwt--is the second largest on record. Rice production in
Mississippi is estimated at 16.4 million cwt, an increase of
nearly 28 percent. In Missouri, 2001 rice production is estimated
at 12.3 million cwt, also up 28 percent from a year earlier. Rice
production in Texas is estimated at 14.5 million cwt, up
fractionally from 2000. In contrast to the southern rice-growing
States, Californias 2001 rice crop is estimated to have declined
nearly 12 percent to 38.5 million cwt, a result of smaller
plantings.
U.S. 2001/02 Long Grain Supplies
Climb to Record 186.1 Million Cwt
U.S. rice supplies in 2001/02 are estimated to have been 254.7
million cwt, up 11 percent from a year earlier and the highest on
record at that time. A bumper crop, record imports, and a larger
carryin, were behind the expanded supplies. Beginning stocks--
estimated at 28.5 million cwt--were up nearly 4 percent from a
year earlier and are the largest since 1995/96. California
accounted for nearly all of the increase in beginning stocks.
U.S. rice imports in 2001/02 totaled nearly 13.2 million cwt, a
record, and up nearly 22 percent from a year earlier. Medium
grain shipments to Puerto Rico from Australia accounted for
almost all of the 2.3-million-cwt year-to-year expansion in
imports. Australia has not typically been a supplier of rice to
the United States. Thailand, India, and Pakistan typically
account for more than 95 percent of U.S. rice imports.
The supply situation varied somewhat by grain type. Total long
grain supplies jumped nearly 22 percent to a record 186.1 million
cwt. A 28-percent increase in production to a record 165 million
cwt plus record imports of 9.2 million cwt more than offset a
decline in beginning stocks. Long grain rice stocks entering the
2001/02 marketing year were estimated at 11.6 million cwt, a drop
of 26 percent from a year earlier and the lowest since 1996/97.
Imports of long grain rice are up nearly 5 percent from a year
earlier.
For medium/short grain rice, total supplies dropped 10 percent in
2001/02 to 67.1 million cwt. A 23-percent cut in production to
47.7 million cwt more than offset a 50-percent increase in
beginning stocks and an almost doubling of imports. Medium/short
imports were estimated at a record 4 million cwt. Shipments to
Puerto Rico from Australia accounted for all of the increase. At
15.6 million cwt, medium/short grain beginning stocks were the
highest since 1995/96.
U.S. Rice Exports
Rose 13 Percent in 2001/02
Total U.S. rice use, including exports, domestic consumption, and
residual (unreported losses in processing, transporting, and
marketing), was 215.8 cwt in 2001/02, up almost 8 percent from a
year earlier and the largest on record at the time. Both exports
and domestic use were higher than a year earlier.
Total domestic disappearance (domestic use plus residual) was a
near-record 121.7 million cwt, up 4 percent from a year earlier.
Food, industrial, and residual--estimated at 117.7 million cwt--
was up 4 percent from 2000/01. Seed use, at 4 million cwt, was
down fractionally from a year earlier.
Long grain accounted for all of the expansion in total domestic
and residual use in 2001/02. Domestic and residual use of long
grain rice is estimated at 85.8 million cwt, up 13 percent from a
year earlier. Some of the increase was due to a shift to long
grain from medium/short grain brewers and food processors. In
contrast, domestic and residual use for medium/short grain rice
is estimated at 35.9 million cwt, down 13 percent from a year
earlier. Tighter supplies and relatively high prices--compared
with long grain rice--accounted for the decline in medium/short
grain domestic use.
Both milled and rough rice exports expanded in 2001/02. Rough
rice exports, estimated at a record 31.7 million cwt, increased
39 percent from a year earlier. Record shipments to Mexico and
Central America were behind the robust rough rice export
expansion. Milled rice exports are reported at 62.4 million cwt,
up 3 percent from a year earlier. In 2001/02, U.S. milled rice
exports were higher than a year earlier to Japan and Uzbekistan.
In contrast, milled rice exports were smaller than a year earlier
to the European Union, South Africa, and Saudi Arabia.
U.S. 2001/02 Ending Stocks
Largest in a Decade
Ending stocks for all U.S. rice rose 37 percent in 2002/03 to 39
million cwt, the largest since 1992/93. The resulting stocks-to-
use ratio rose to 18.1 percent from 14.2 percent a year earlier.
Long grain rice accounted for all of the increase.
Ending stocks of long grain rice rose 130 percent to 26.8 million
cwt, the largest since 1986/87. The resulting stocks-to-use ratio
more than doubled to 16.8 percent, the largest since 1992/93. In
contrast, combined medium/short grain ending stocks declined
nearly 32 percent to 10.7 million cwt. The stocks-to-use ratio
dropped to 18.9 percent from 26.3 percent in 2000/01.
The 2001/02 season-average price was reported at $4.17 per cwt,
down nearly 26 percent from a year earlier and the lowest since
1986/87. Record U.S. supplies and only fractional strength in
international trading prices--which were the lowest in three
decades at the start of the 2001/02 market year--were the primary
factors behind a weaker U.S. average rice price in 2001/02.
International Outlook for 2002/03
Global Prices Show Little Strength Despite Larger Trade
Despite three consecutive years of declining world rice
production and stronger trade this year, global trading prices
remain at near-15 year lows. In fact, prices have actually
dropped 5-10 percent since spring, primarily due to continued
large subsidized exports by India. From March through mid-
November 2001, international prices were the lowest in three
decades. Beginning last December, prices have been slightly
boosted by government intervention purchases by Thailand. Little,
if any, price strength is expected in the near-term as Thailands
and Vietnams main crops are harvested. Although global
production is projected to drop 4 percent in 2002/03, major
exporting countries are projected to have adequate supplies to
meet export commitments. In addition, except for parts of the
Middle East and Central Asia suffering from continued drought, no
major importing region is currently experiencing a significant
weather problem. In Indonesia, despite a delay in the onset of
the rainy season, a bumper 2002/03 crop is still projected.
Global Rice Production Projected
To Drop Third Consecutive Year
In late November 2002, global trading prices were at near-15 year
lows and had traded within a very narrow range since late August.
Prices had actually strengthened from January 2002 through mid-
July, primarily due to government intervention purchases by
Thailand. Record exports of subsidized rice by India account for
weaker prices this fall.
In 2003, global prices are projected to post modest increases,
despite expectations of bumper harvests in Thailand and Vietnam
in 2002/03. Two factors are behind the mildly bullish price
outlook. First, the government of Thailand announced early this
year that it would continue its intervention purchases in
2002/03. And second, India just announced it will lower its
subsidy level for rice exports next year, likely giving a boost
to global prices in 2003. This price expectation assumes normal
weather.
World rice production is projected at 381.8 million tons (milled
basis) in 2002/03, down almost 4 percent from a year earlier and
the lowest since 1996/97. This is the third consecutive year of
declining global rice production, with production projected to be
nearly 7 percent below the 1999/2000 record of 409.3 million
tons.
India, a major exporter and second largest rice producing
country, accounts for the bulk of this years decline, with
2002/03 rice production projected to drop 15 percent from a year
earliers record to 78 million tons, the smallest since 1992/93,
a result of an unfavorable monsoon. China, also a major exporter,
accounts for most of the rest of this years global production
decline. This is the fifth consecutive year of lower production
in China, the worlds largest producer. Despite smaller crops,
both of these countries have plenty of rice for their domestic
market and to remain major exporters. Two other exporters--
Pakistan and Australia--are projected to harvest smaller crops
this year. However, little price strength is likely given
projections for bumper crops in other major exporting countries,
i.e., Thailand, Vietnam, the United States, and Egypt.
Among the major importers, only South Korea, the Philippines, and
Japan are projected to harvest significantly smaller crops this
year. And except for the Philippines, the weaker crops will not
effect import levels. Despite a boost in rice production in North
Korea this year, total food supplies remain inadequate, a result
of several years of declining food production. Outside Asia,
Brazil--the largest non-Asian rice producing country--is
projected to produce a slightly smaller crop in 2002/03, boosting
imports. Severe drought continues to limit production in Iran and
Iraq, although production is projected to increase slightly for
both countries this year. And while Nigerias production is
projected to increase for the third consecutive year, production
remains 50 percent below levels reported a decade ago. In
contrast to these importing countries, bumper crops are projected
for Indonesia, Bangladesh, and Malaysia.
Global ending stocks are projected to drop 20 percent to 106.1
million tons. This is the third consecutive year of declining
global stocks and the lowest since 1987/88. In 1999/2000, global
ending stocks were a record 144.2 million cwt.
China accounts for more than half of this years expected
reduction in global ending stocks. Chinas ending stocks have
declined each year since the 1999/2000 record of 98.5 million
tons. Indias ending stocks are projected to drop nearly 40
percent this year to 13.9 million cwt, the smallest since
1998/99. Stocks are expected to decline in 2002/03 in Indonesia,
Vietnam, Thailand, Burma, and Brazil as well.
World trade is projected at more than 26.6 million tons in
calendar year 2003, fractionally above a year earlier and second
only to the 1998 record of 27.6 million. In 2003, larger imports
by Iran, Bangladesh, the European Union, Saudi Arabia, China,
Russia, and Yemen are projected to nearly offset weaker imports
by Indonesia, Iraq, Senegal, and Brazil. Imports are projected
unchanged from 2003 for Nigeria, the Philippines, Japan,
Malaysia, Cuba, Mexico, and South Africa. Among exporters,
stronger exports by Thailand, Burma, China, Vietnam, Australia,
and the United States are nearly matched by projected reductions
for India and Pakistan.
In 2002, global trade rose 9 percent to almost 26.6 million cwt.
A major expansion in Indonesias imports to 3.5 million tons,
near-record imports by Iran and Iraq, and continued large
purchases by the Philippines were responsible for the bulk of the
import expansion in 2002. On the export side, a 4.6-million-ton
jump in Indias exports to 6.5 million more than offset
reductions by nearly all other exporting countries this year.
International Trading Prices
Remain Depressed
Global trading prices are currently at near-15-year lows, despite
three consecutive years of declining world production and ending
stocks, and--since 2001--stronger global trade. In fact, prices
have actually dropped 5-10 percent since mid-summer, a result of
a record pace of subsidized exports from India.
Prices had risen from December 2001 through last spring,
primarily due to government intervention purchases by Thailand
and temporary supply problems in Vietnam. During much of 2001
trading prices hovered at 30-year lows, a result of subsidized
exports from India (which began in June 2001), and adequate
export supplies worldwide.
In November 2002, export price quotes for Thailands 100 percent
grade B in Bangkok averaged $193 per ton, up a dollar from a
month earlier and nearly $20 higher than a year earlier. Since
August 2002, prices have traded between $188 and $197 per ton.
Government intervention purchases and currency fluctuations
account for much of the oscillation since August. Price quotes
for Vietnamese 5-percent brokens in Ho Chi Min City averaged $186
per ton in November 2002, down a dollar from a month earlier and
about $5 below September. Recent declines are due to completion
of its 10th-month harvest. Vietnams prices have traded within a
very narrow range since late 2001.
Like Thailand, Vietnam faces intense competition from India in
low quality markets. Since June 2001, India has been the lowest-
priced source for rice, first for parboiled rice and low quality
100 percent brokens, and more recently for higher quality regular
milled white rice. Except for its premium basmati rice and top
quality parboiled rice, India rarely competes with the United
States in the global rice market.
Prices for similar type and quality of U.S. long grain rice--No.
2, 4-percent brokens, f.o.b. Houston--have risen 20 percent since
June largely due to tight milling capacity. In November, price
quotes at Texas mills for U.S. long grain milled rice (number 2,
4 percent brokens) averaged $198 per ton, unchanged from early
September but $20 to $30 higher than quoted prices last summer.
Despite the recent strength, prices are likely to be under
substantial pressure the remainder of the market year due to
record supplies and intense competition in the global market.
The U.S. price difference over Thailand for similar grades of
rice has narrowed substantially since the start of the 2001/02
market year. In November 2002, the difference averaged $21 per
ton, nearly unchanged since September 2002 but well below the
August 2001 average of more than $100. The difference had
actually disappeared during much of the summer. Recent price
strength for U.S. rice accounts for the slight difference in
prices. From 1997/98 through 2000/01 the difference averaged
about $80 per ton.
Prices for U.S. California milled rice have remained
substantially higher than prices for U.S. long grain. This month,
quoted prices for California medium grain milled rice (number 1,
4 percent brokens, Sacramento mill) average $265 per ton,
unchanged since April. Prices dropped about $22 per ton in April
on expectations of a larger 2002 California crop. Recent sales to
South Korea and Taiwan--plus regular purchases by Japan--have
offset the price effects of this years larger California crop.
Thailand, Vietnam, and China Projected To Ship More Rice in 2003
Of the six largest rice exporters--Thailand, India, Vietnam, the
United States, China, and Pakistan--only India and Pakistan are
projected to ship less rice in 2003, with India accounting for
the bulk of the decline. Thailand, Vietnam, China, and the United
State are projected to export greater quantities. Among the
medium-sized exporters, Burma, Australia, and Uruguay are
projected to expand exports in 2003 while exports from Egypt and
Argentina are projected unchanged from 2002. In 2002, record
exports of 6.5 million tons by India more than offset reductions
by nearly all major and medium-sized exporters.
Major Exporters
Thailand: Thailand is expected to remain the world's largest
rice exporter, shipping a near-record 7.5 million tons in 2003,
up 1 million from this year. A bumper crop and robust world trade
are behind the bullish export forecast. Thailand's 2002/03 crop
is projected at a record 16.5 million tons (milled), unchanged
from a year earlier and only slightly below the 2000/01 record. A
fractional drop in area is projected to offset a higher yield in
2002/03.
Thailand traditionally competes with the United States in certain
high-quality long grain rice markets--primarily in the European
Union (EU), the Middle East, and South Africa--and with Vietnam,
India, China, and Pakistan in various intermediate- and low-
quality long grain markets. Thailand exports mostly indica rice--
including parboiled rice and 100 percent brokens--and smaller
quantities of premium jasmine rice, an aromatic. Thailand exports
more than a million tons of its premium jasmine rice each year,
with the United States a major market.
Vietnam: Vietnam is typically the world's second largest rice
exporter and is projected to export 4 million tons in 2003, up
900,000 tons from this year. Exports would still be below
Vietnams 1999 record of 4.55 million tons. Intense price
competition from India, plus occasional supply problems,
accounted for Vietnams 2002 weak export performance.
Vietnam is projected to produce a near-record 27.6 million tons
of rice in 2002/03, virtually unchanged from a year earlier but 3
percent below the 1999/2000 record. A slightly higher yield is
expected to offset a fractional drop in area this year. All of
Vietnams rice exports are indica rice.
Vietnam produces three major rice crops a year. The 10-month crop
accounts for 25 percent of production and is harvested between
November and February in the South. This crop is declining in
area and is the lowest yielding of Vietnam's three crops. The
largest crop, the winter-spring crop, accounts for nearly 50
percent of total production and is harvested in February-March.---1/
----
1/ The harvest dates are for production occurring in southern
Vietnam. Harvest dates differ in the north, but most rice
production occurs in the south.
----
The winter-spring crop has more than doubled since 1988/89 and
has the highest yield of the three crops. The winter-spring crop
accounts for the bulk of Vietnams exports. As of late November,
the Government of Vietnam was projecting a bumper winter-spring
harvest. The summer-autumn crop accounts for 25 percent of annual
production and is harvested July through September.
China: China's 2003 rice exports are projected to climb 500,000
tons to 2.25 million, still well below the 1998 record of more
than 3.7 million tons. Although Chinas 2002/03 crop is projected
to drop 1.1 million tons to 123.2 million--the sixth consecutive
year of declining production and the smallest crop since 1994/95-
-it still has plenty of rice to satisfy domestic demand and to
expand exports. The smaller crop is based on weaker plantings
more than offsetting a higher yield.
Chinas 2002/03 rice area is estimated at 28 million hectares,
down 812,000 from a year earlier and the smallest since 1963/64.
Chinas rice plantings have declined nearly 12 percent since
1997/98, with its early indica crop accounting for the bulk of
the decline. China announced a new grain policy in 1999 that
reduces incentives to plant low-quality early rice, which is
grown mostly in the south. Much of the early rice crop is of poor
quality and is either stored for years or used as feed.
United States: The United States is projected to export 3.2
million tons of rice in 2003, up 100,000 from 2002 and the
largest on record. Record U.S. supplies, competitive prices, and
robust global import demand are behind the record trade forecast.
The U.S. share of world trade is projected at 12 percent, up
fractionally from a year earlier but still below 2000.
The U.S. share of world rice trade has generally declined since
the mid-1970s. In 1975, the United States accounted for about 28
percent of global rice exports. By 1989, the U.S. share had
shrunk to 20 percent and was less than 15 percent by 1995.
Greater supplies from low-cost Asian exporters account for the
bulk of the decline in the U.S. market share over the past 25-
plus years. In the late-1980s, Vietnam re-entered the global rice
export market after an absence of more than 30 years. In the mid-
1990s, India switched from exporting a few hundred thousand tons
a year to regularly exporting more than a million tons. In
addition, by the 1990s the top South American exporters--
Argentina and Uruguay--both significantly expanded exports,
mostly within the MERCOSUR trading block.
Southern long grain accounts for around 80 percent of U.S. rice
exports, with Mexico, Central America, the EU, Saudi Arabia,
Canada, and South Africa the largest markets. Brazil sometimes
buys substantial amounts of U.S rice, when regional supplies are
inadequate. The United States also exports smaller quantities of
japonica rice, mostly to Japan, Turkey, and Jordan. Since 2001
the United States has also exported japonica rice to Uzbekistan
and South Korea. This year Taiwan bought U.S. rice as part of its
World Trade Organization agreement. California supplies most of
U.S. japonica exports.
India: For 2003, India is projected to export 4 million tons,
down 2.5 million from its 2002 record but still one of the
highest le
