World Grain - April 2005 - 14

Grain Market

grainmarketreview

Review
sponsored by

Rice
World stocks to see fourth straight
year of decline
by Melissa Alexander
Global rice production in 2004-05 is projected to rise from a year
earlier, but an even larger increase in consumption again will draw
down world ending stocks for the fourth consecutive season.
At 402.1 million tonnes, milled basis, the projected 2004-05
world harvest will be up about 3% from 2003-04, but well below the
1999-2000 record of 408.7 million tonnes.
China's production should jump to 126 million tonnes in 2004-05
from 112.46 million the previous season, while output in the Philippines is expected to move up to a record 9.3 million tonnes. Other
major market players, such as Vietnam, India and Indonesia, each
should see this season's rice production nearly unchanged from
2003-04.
The largest percentage year-to-year production decline will occur
in Thailand, which has been plagued by a severe drought. There, rice
output in 2004-05 is projected at 17 million tonnes, down 5.6% from
2003-04's record output of 18.1 million and the smallest harvest
since 1999-00.
Global consumption in 2004-05 is projected at 413.2 million
tonnes, up slightly from the previous year and a record high. Because
rising use again will outpace production, 2004-05 ending stocks are
projected to decline to 75.3 million tonnes.
That ﬁgure would be almost 13% below a year earlier and the lowest in volume terms since 1983-84. And, at 18.2%, the stocks-to-use
ratio would be the lowest since 18.1% in 1981-82.
Global rice trade for calendar year 2005 is projected at 25.4 million tonnes, down 4% from a year earlier. The 2005 ﬁgure if realized
would mark the third consecutive year of declining global rice trade
and would be well below the 2002 record of 27.8 million tonnes.
Slower trade during the past few seasons primarily has been based
on record and near-record supplies in several large rice importing
countries, including Indonesia, Bangladesh, Brazil and Nigeria.
Indonesia in 2005 should import 1 million tonnes, up 300,000
from the previous season but well below the 2- million to 3-million-tonne levels seen in 2002 and 2003. Brazil's 2005 imports are
forecast at 550,000 tonnes, the lowest in at least ﬁve years.
Nigeria has halved its import levels since 2001 to a forecast
1.4 million tonnes in 2005. Nonetheless, Nigeria would be the
world's largest importer in 2005, as Saudi Arabia, the 2004 leader at
1.5 million tonnes, is estimated to import only 1 million this year.
Despite its drought woes, Thailand will remain the world's largest exporter in 2005, forecast to ship 8.5 million tonnes versus
10.1 million in 2004. Vietnam is projected to export a record
4.2 million tonnes in 2005.
14

2003-04 estimated; **projected
Source: U.S. Department of Agriculture

Thai: 100%, grade B, FOB Bangkok; Vietnam: 5% brokens, FOB Saigon
U.S.: Long grain, No. 2, 4% brokens, Texas
Source: U.S. Department of Agriculture

Rice prices in the past month or so have trended downward, but
still remain higher than at the same time last year.
Despite the recent decline, Thailand's prices are up more than 22%
from late September. That price rise is based on Thailand's higher
2004-05 intervention purchase price, the drought, a stronger Thai
baht and generally tight exportable supplies across much of Asia.
Vietnam's prices dropped slightly during February as the harvest
of its main winter-spring crop began, but prices had increased from
November through early February because of tight supplies. Prices in
early February were the highest since November 1998.
U.S. prices for long-grain milled rice have dropped sharply since
June, pressured by a record 7.3 million-tonne crop. A pick-up in
export demand as the season progressed boosted projected overseas
shipments to 3.45 million tonnes, second only to the 3.86 million
exported in 2002-03, and helped prices stabilize by mid-March. WG
We want to hear from you - Send comments and inquiries to
worldgrain@sosland.com. For reprints of WG articles, e-mail reprints@sosland.com.

April 2005 / World Grain / www.World-Grain.com

http://www.World-Grain.com

World Grain - April 2005

Table of Contents for the Digital Edition of World Grain - April 2005