World Grain - September 2006 - 18

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World rice stocks situation
(in 1,000 tonnes, milled basis, and percent)

160,000

Rice
World stocks to remain
relatively tight through 2006-07
by Melissa Alexander

140,000

40%
35%

120,000 Stocks-to-use ratio

30%

100,000

25%

80,000

20%

60,000

15%

40,000

10%

20,000

0
1975-76

1980-81

1985-86

1990-91

1995-96

0%
2000-01 2005-06*

*estimated
Source: U.S. Department of Agriculture

International rice prices
in U.S. dollars per tonne, milled basis
470

U.S.

Vietnam

Thai

420
370
320
270
220
170
120
July
May
March
Jan-06
Nov.
Sept.
July
May
March
Jan-05
Nov.
Sept.
July
May
March
Jan-04
Nov.
Sept.
July
May
March
Jan-03

World rice production for 2006-07 is projected at a record
417.8 million tonnes (milled basis), up less than 1% from
415.8 million in 2005-06, according to a recent estimate from
the U.S. Department of Agriculture (USDA).
The year-to-year increase is based on expected larger plantings, the USDA said.
Global rice use in 2006-07 is projected at a record
418.7 million tonnes, up 1% from the previous season's
413.9 million. A rise in consumption in India, to 87.5 million
tonnes, is forecast to account for more than 2 million of the
world increase. In China, the world's largest rice consumer, use
should continue to gradually decline, falling to 127.8 million in
2006-07, compared with 135.7 million as recently as 2002-03.
Global rice stocks at the end of 2006-07 are projected at
79 million tonnes, nearly 1 million tonnes below the 79.9 million
at the end of the 2005-06 season. Ending stocks have been relatively stable since 2004-05 after dropping sharply from the record
high of 150.4 million in 2000-01.
The 2006-07 stocks-to-use ratio is projected at 19%, fractionally below the ratio of 19.4% for 2005-06. Although the rate of
stocks decline has slowed, the 2006-07 ratio would be the lowest
since 1981-82, when it stood at 18.1%.
But the recent stocks forecast, although relatively tight, is
sharply higher than USDA's projection earlier this year, when the
supply-and-demand balance sheet for 2005-06 resulted in a ratio of 16%, a 31-year low. The tight scenario improved based on
sharp increases in actual output in two key producing countries
during the 2005-06 season.
India's 2005-06 rice harvest now is estimated at 91 million
tonnes, second only to its record 93.3-million harvest in 2001-02.
India is forecast to produce 91 million tonnes again in 2006-07.
Thailand also enjoyed a record harvest in 2005-06, at an estimated 18.2 million tonnes. The USDA projects Thailand will
break that record in 2006-07, harvesting 18.5 million tonnes.
Global rice trade for calendar year 2007 is projected at
27.9 million tonnes, down slightly from 28.2 million in 2006.
Weaker exports from Pakistan, Vietnam, the U.S. and Egypt are
expected to more than offset a big increase in exports for both
Thailand and India, where expected larger harvests will boost exportable supplies.
World export leader Thailand is forecast to ship 8.25 million
tonnes in 2007, up 13% from 7.3 million in 2006, but lagging
its record of 10.14 million in 2004. India's 2007 exports are projected at 4.3 million tonnes, up 500,000 from the 2006 estimate.
As for imports in 2007, substantially smaller purchases by
Iran, the Philippines and South Korea are projected to more than
18

45%

Ending stocks

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

offset larger imports by Brazil, China, Madagascar, Senegal
and Turkey. Nigeria, with 2007 imports projected at 1.7 million
tonnes, unchanged from 2006, would become the world's largest
importer, with the Philippines close behind at 1.65 million tonnes
versus 1.9 million in 2006. Iraq would rank third, with imports of
1.2 million tonnes, unchanged from 2006.
In 2006, global trade, at 28.2 million tonnes, should decline
by 2% from the 2005 record of 28.9 million. Weaker imports by
Bangladesh, Saudi Arabia, Japan, North Korea and Turkey are
projected to more than offset larger imports by Iraq, South Korea,
Iran and the U.S.
Thai and U.S. rice prices have advanced fairly steadily in recent
months amid a strengthening Thai baht and smaller U.S. supplies.
Vietnamese prices, after dipping earlier this year, moved up because of large outstanding export contracts and potential buying
interest from Indonesia. However, as of mid-August, Indonesian
officials indicated the rice import ban would remain in effect for
WG
the rest of 2006.
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