Prices for long grain milled are priced at or just above $650 pmt, whereas prices in South America are at least $100 pmt below that. South America is in the peak of their harvest season, with several questions swirling around the drought situation in Brazil. We know that Uruguay has crested the high point, and is on the downhill slope of the last 20% of their crop. Argentina is just ahead of them. Brazil and Paraguay are the big swings that will be coming to light in the next few weeks.
In Asia, prices have held steady despite the inflationary rise that so many other commodities have seen. For more than a quarter now, prices in Thailand and Vietnam have oscillated around $400 pmt, while India and Pakistan have been around $360 pmt. This can in large part be attributed to India, who hasn’t slowed exports over the COVID-19 pandemic, and has been responsible for its third record crop in as many years.
India’s farm subsidies, which many speculate have led to their record crop, has blunted the inflationary impacts of rice world-wide. With rice being the most basic food calorie for human consumption that prevents hunger for the poorest nations, this can be viewed as a positive in the global environment. However, India’s rice subsidy violations have put a burden on many rice producers around the globe; these violations were front-and-center this week with the World Trade Organization (WTO).
India has been called out by the U.S. rice industry and others to stop creating an unfair playing field with their rice subsidy program. It is making rice from the United States and other origins uncompetitive on a global scale, and can have severe detrimental impacts on food security world-wide in the future.
Prices on the ground show Texas in the lead at $17/cwt. Louisiana is strong at $15.25/cwt, while prices in Mississippi, Arkansas, and Missouri are fluctuation between $14.75-$15.75 based on variety and qualities.
The weekly USDA Export Sales report shows net sales of 8,300 MT this week, a marketing-year low, down 51% from the previous week and 81% from the prior 4-week average. Increases primarily for Mexico (13,700 MT), Haiti (7,300 MT), Jordan (4,000 MT), the Dominican Republic (2,000 MT), and Honduras (1,500 MT), were offset by reductions primarily for Colombia (22,000 MT).
Exports of 80,300 MT were up noticeably from the previous week and up 98% from the prior 4-week average. The destinations were primarily to Mexico (32,700 MT), Colombia (22,300 MT), Haiti (15,300 MT), El Salvador (4,100 MT), and Canada (2,000 MT).In the futures market, May 22 prices are down just over 1% this week to $16.010. May 23 contracts are about flat from last week, now at $16.615. Average Daily Volume registers at 411, down 23% from last week, while open interest is flat at 9,701.
Iraq Makes First Purchase of U.S. Rice under the U.S.-Iraq Memorandum of Understanding
May 19, 2017 - by Eric Schroeder
The USDA said Cambodia’s rice millers have shifted their attention to the expanding Chinese market in light of new rules in the European Union that have tightened the residue limit of tricyclazole on rice. Cambodian rice farmers commonly use tricyclazole to control rice blast fungus, but effective June 2017 the E.U. said it will implement a new threshold of tricyclazole residue for white rice — 0.01 mg per kg of paddy — and in December 2017 will implement a new tricyclazole residue level for fragrant rice — at 0.01 mg per kg.
“Amid rice millers’ concern of the E.U.’s potential ban on Cambodian rice that fails to meet the chemical residue threshold, the government of Cambodia is looking into substitute options and raising awareness of farmers on proper usage of fungicides,” the USDA said.
Cambodia exported a total of 542,144 tonnes of milled rice in 2016, up 0.7% from 2015. China was the largest destination, importing 127,460 tonnes, a figure that is forecast to grow to 200,000 in 2017, the USDA said. The increase in demand from China is expected to outpace the potential decline in demand from traditional E.U. buyers.
“Last December, China National Cereals, Oils, and Foodstuffs Corporation (COFCO) approved 18 Cambodian rice millers for exporting rice to China as part of an agreement signed between COFCO and the Cambodia Rice Federation (CRF),” the USDA said. “Additionally, the Ministry of Agriculture Fisheries and Forestry (MAFF) selected 28 rice millers who have demonstrated competence to meet the requirements for exporting rice into China. The CRF is urging the government to facilitate more access to the China market to offset potential decrease demand from E.U.
“The cross border rice trade is a vital pathway for Cambodia rice export into Thailand and Vietnam. However, Thailand’s reduction in stock and a production recovery this year show no signs of an increase in import demand. Meanwhile, the cross border trade with Vietnam is robust mostly because of strong demand for Cambodian rice to serve local Vietnamese consumers who prefer quality fragrant rice.”
Overall milled rice exports are forecast to increase 5% to 570,000 tonnes in 2017, and 8% to 615,000 tonnes in 2018, the USDA said.
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