World Grain - June 2015 - (Page 22)

GRAINMARKET REVIEW Rice Sluggish demand from importers makes for soft prices by Chris Lyddon 500 400 300 200 100 Apr 2015 Mar 2014 Feb 2014 Jan 2014 Dec 2014 Nov 2014 Oct 2014 Sep 2014 Aug 2014 July 2014 0 Jun 2014 22 (in 1,000 tonnes) May 2014 Apr 2014 Slow demand from importers, notably in Africa, has given the rice market a soft tone in recent weeks, with prices steady to lower, even though a record new crop is set to meet even higher consumption. "Amid few fresh fundamental developments, Asian white and parboiled rice markets were steady to modestly lower during April," the International Grains Council (IGC) said in its Grain Market Report. "Highlighting generally weaker sentiment, the IGC GOI rice subIndex fell by around 1% m/m, to its lowest since early 2008." Export prices in Thailand eased, the key 5% broken grade down by $5, to $385 fob, it said. "Despite mild support from domestic purchases ahead of the Songkran festival, a period associated with increased consumption, sluggish international demand weighed. "Aside from sales through diplomatic channels, buying interest from key importers in Asia and Africa has been limited, while the temporary suspension of state auctions to sell stockpiled rice has added to uncertainty," it said. "In Vietnam, broken rice markets fell slightly as initial support from the government's main crop stockpiling scheme was outweighed by limited export interest - including from China, a major buyer in recent years." The 5% grade fell by $9, to $359 fob. "Markets elsewhere in Asia were mixed, with offers in India steady to lower in thin activity, partly pressured by the imminent winter-sown (rabi) crop harvest," it said. "Outside of Asia, export prices in the Americas dropped further, with values in Argentina and Brazil weighed by increasing new crop availabilities." The USDA's Economic Research Service (ERS), in its Rice Outlook, also noted a fall in most grades of Thailand's regular-milled white rice by 2% to 4% from a month earlier, which it blamed on a lack of new sales and a weaker baht. "Price quotes from Vietnam have decreased slightly over the past month, with new sales slow," it said. "U.S. prices for long-grain milled rice and rough rice have declined from a month earlier." The ERS projected global rice production in 2015-16 at a record 482.1 million tonnes on a milled basis, 6.4 million tonnes more than in the previous year. "The bumper crop is primarily due to expanded area," it said. "At a record 161.9 million hectares, global rice area in 2015-16 is up 1.7 million hectares from a year earlier." Most of the increase in area is in Bangladesh, India, and Thailand. The ERS projects global rice consumption up 1% at 489 million tonnes in 2015-16. "This is the third consecutive year of consumption exceeding production," it said. "China accounts for the bulk of the projected increase in global consumption. At 151 million tonnes, the country's rice consumption is up almost 2% from a year earlier, 5 million tonnes above production, and the highest on record." ERS is also projecting record consumption in Bangladesh, Burma, Rice exports by key countries Source: World Bank Cambodia, India, Indonesia, the Philippines, Thailand, and Vietnam. "Although not a record, U.S. consumption is projected to increase 1% in 2015-16 to 4.17 million tonnes," it said. In the commentary accompanying its Rice Price Update, the United Nations Food and Agriculture Organization (FAO) also noted falling prices. "In April 2015, the FAO All Rice Price Index (20022004=100) averaged 218 points, only 1 point less than in March, but the eighth consecutive month of declines," it said. "Quotations in the Higher Quality Indica, Aromatic and Japonica rice segments were slightly down compared to March, while Lower Quality Indica prices showed some strength, with the corresponding sub-index gaining about 2 points, or 1%." It reported a falling price trend in Thailand on subdued demand, despite growing evidence of a much reduced 2014 secondary crop. "In Vietnam, the ending of the government 1-million-tonne procurement round may have contributed to a retreat of export quotations, while in India a similar weakening could be partly attributed to the arrival of the new supplies from the Rabi harvest," it said. ³$JDLQVWWKHWLGHSULFHVLQ3DNLVWDQ¿UPHGSDUWO\UHÀHFWLQJKHDY\ rains and logistical domestic constraints that hindered rice transportation and deliveries. Prices were under downward pressure in South America, especially Brazil and Uruguay, but largely stable in the United States. ³$FFRUGLQJWRWKH)$2,QGH[LQWHUQDWLRQDOULFHSULFHVLQWKH¿UVW four months of 2015 were 6.3% lower than in the corresponding period in 2014. Only Japonica rice prices averaged higher than last year, amid prospects of continuing tight supplies from Australia and California. Apart from the strong dollar, the general tendency for weaker SULFHVVRIDUWKLV\HDUDOVRUHÀHFWVDUDWKHUVXEGXHGLPSRUWGHPDQG especially from African countries." Chris Lyddon is World Grain's European editor. He may be contacted at: chris.lyddon@ntlworld.com. We want to hear from you - Send comments and inquiries to worldgrain@sosland.com. For reprints of WG articles, e-mail reprints@sosland.com. June 2015 / World Grain / www.World-Grain.com http://www.World-Grain.com

Table of Contents for the Digital Edition of World Grain - June 2015

World Grain - June 2015
Table of Contents
From the Editor-in-chief - Flour output data points to eating trends
Calendar of Events
News review - Ceremony marks opening of Whitewater Mill
ADM plans extensive improvements at Argentina port
Dangote Flour Mills hurts Tiger’s earnings
GrainCorp Oils increasing oilseed crushing capacity
Noble Agri appoints former ADM executive as CEO Jansen
Hovis names new CEO
Southern Africa nations facing food shortage
EBRD provides loan to Turkish edible oil producer
Gruma full steam ahead on European expansion
Oilseeds, grains push Wilmar earnings up 49%
GrainCorp earnings drop on smaller crop
ADM makes management appointments in key areas
ADM earnings surge on oilseed crush margins
Bunge returns to profit on soybean crushing
GrainCorp plans upgrades at 13 sites
Grain Market Review - Rice
Country Focus - Argentina
Technical Profile - Crustless pan bread favored in Argentina
Feature - Bridging a Gap
Feature - Chinese Reforms Creating Market Uncertainties
Feature - Investing in Food Security
Feature - Grain Storage and Handling Projects
Feature - IAOM Conference 2015
Feature - China, currency impacting markets
Feature - A new plan for Egypt
Feature - Team approach to marketing for Canadian grains
Canadian wheat customers share their experiences
Feature - IAOM MEA District Conference & Expo
Feature - Traders Utilizing Exchanges More than Ever
Supplier News
Product Showcase
World Grain Archive
Advertiser Index

World Grain - June 2015

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