World Grain - June 2016 - 20

GRAINMARKET REVIEW
Rice monthly price

Rice
Global production, consumption
set to break records
by Chris Lyddon

(U.S. dollars per tonne)

400
350
300
250
200
150
100

0
Apr 2016

Mar 2016

Feb 2016

Jan 2016

Dec 2015

Nov 2015

Oct 2015

Sep 2015

Aug 2015

Jul 2015

Jun 2015

May 2015

50
Apr 2015

International rice prices have remained stable in recent months,
with increases in some important markets, as what is expected to
be a record-setting world crop in 2016-17 is forecast to meet record
consumption, producing only a very limited rise in ending stocks.
In its commentary on its Rice Price Update for May, the Food and
Agriculture Organization (FAO) said that its All Rice Price index
(2002-04=100) averaged 195 points, hardly changed from its March
value of 196.
"The one-point decline was brought about by weaker Japonica prices, as quotations in both the Indica and fragrant rice segments tended
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"There were few new rice deals in April, as leading buyers, such as
the Indonesian BULOG or the Philippines NFA, remained glaringly
absent from the market, while many African countries (not including Nigeria) were reported to hold large supplies," the FAO said.
"Nonetheless, there was a general strengthening of export quotations
in Thailand on concerns about the small size of the 2015 secondary
crop, which lifted the Thai 100% B white benchmark price to $400.8
per tonne, 2.2% more than in March.
"Prices in most Asian origins also showed a tendency to increase:
in Pakistan, on brisk demand; in Vietnam, on concerns about the
effects of the severe drought on crops; and in India, on continuing
government procurement purchases. In the Americas, prices declined
in the United States on very limited new business, while an appreciation of local currencies against the U.S. dollar sustained Argentina
and Brazil's rice quotations."
The report also noted that the according to the FAO All Rice Price
Index, international rice prices have remained stable since October last
year, with its April 2016 value still trailing 11% behind year-on-year.
In its Grain Market Report, published at the end of April, the
International Grains Council (IGC) said that white and parboiled
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drought conditions in key producers, although gains were capped
by limited fresh demand." Its IGC GOI rice sub-Index rose by 1%
month-on -month.
"In Thailand, offers for key white and parboiled rice grades were
boosted by concerns about 2016-17 output prospects," the IGC reported. "This followed a government announcement that main crop
plantings, which were expected to be delayed, could be limited to
8.9 million hectares (9.9 million last year). However, reports that the
Ministry of Commerce planned to maximize sales of its heavy stockpile within two months had little discernible market impact."
In Vietnam, production concerns were supportive to the market,
but export prices had been lower to stimulate buying interest. In India, there was mild pressure from the rabi crop, but prices still rose
worries about hot, dry conditions.
"Values in South America were mixed, with some underpinning
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5% broken milled white rice, Thailand nominal price quote.
Source: World Bank

dium grain markets were softer, tied to good U.S. planting progress
and pressure from harvesting in Australia."
It quoted U.S. fob prices for 4% broken (California) down by $20,
at $700.
The USDA's Economic Research Service in its Rice Outlook report for May, forecast record high global rice production in 201617 at 480.7 million tonnes (milled basis), up 2% from the previous
year's crop, which was reduced by the effect of El Niño.
"The substantial increase in global production is primarily due to
expanded area. At 160.6 million hectares, global rice area is up 2.8
million hectares from a year earlier but still 1.1 million below the
2013-14 record," it said. "Brazil, Burma, Cambodia, Central America, China, India. Indonesia, the Philippines, Sub-Saharan Africa and
the United States account for the bulk of the global area expansion in
2016-17, with India, Indonesia and the United States accounting for
more than half the increase.
"The global area expansion is largely due to few economically viable alternative planting options, producer support programs in several Asian countries and a desire by many countries to rebuild stocks
after El Niño reduced production in 2015-16. The average global
yield of 4.46 tonnes of rough rice per hectare is up fractionally from
this year and the highest on record. The average global yield has
risen just slightly since 2012-13."
The ERS also forecast global consumption for 2016-17 at a record
480.5 million tonnes, up 2.1 million tonnes on the year. With consumption nearly equal to production, ending stocks are forecast up
just 200,000 tonnes at 106.6 million.
"Brazil, Burma, India, Japan, the United States and Thailand account for the bulk of the expected increase in global consumption in
2016-17," the ERS said.
"In contrast, consumption is expected to decline in 2016-17 in
China and Nigeria."
Chris Lyddon is World Grain's European correspondent.
He may be contacted at: chris.lyddon@ntlworld.com.
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