RICE YEARBOOK December 20,2001 November 2001, ERS-RCS-2001 Approved by the World Agricultural Outlook Board -------------------------------------------------------------------------- RICE YEARBOOK is published annually by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. This release contains only the text of the report --tables and graphics are not included. Printed copies of the yearbook will be available from the USDA Order Desk. Call, toll-free, 1-800-999-6779 and ask for stock # ERS-RCS-2001. ERS-NASS accepts MasterCard and Visa. -------------------------------------------------------------------------- Record Supplies, Lower Prices Projected for 2001/02 U.S. Rice Market Total U.S. rice supplies for 2001/02 (August-July) are projected at 249.2 million hundredweight (cwt) (rough basis), up almost 9 percent from a year earlier and the largest on record. A 10-percent increase in production to a record 209.7 million cwt and an almost 4-percent increase in beginning stocks to 28.5 million cwt account for the bulk of the supply increase. In addition, imports are projected up 1 percent to a record 11 million cwt. U.S. rice plantings for 2001/02 are estimated at more than 3.3 million acres, up more than 8 percent from a year earlier. Higher total returns to rice than alternative crops--primarily soybeans in the South--were behind the rice acreage expansion. The average yield is projected to be a record 6,374 pounds per acre, up fractionally from a year earlier. Extremely good weather during the growing season across much of the South--where the bulk of the U.S. crop is grown--and increased plantings of new, higher yielding southern long grain varieties are behind this year's second consecutive record yield. Long grain accounts for all of the increase in production. Long grain production in 2001/02 is projected at a record 162.3 million cwt, up 26 percent from a year earlier. At planting, long grain prices were slightly higher than a year earlier and stronger than prices for medium grain, major factors behind increased long grain acreage this year. Nearly all U.S. long grain rice is produced in the South. In contrast, combined medium/short grain production is projected to decline nearly 24 percent to 47.5 million cwt, a result of a 26-percent drop in plantings. Extremely low prices at planting--the result of a record 2000 California crop--were behind the decline in medium/short grain acreage plantings. California accounts for more than two-thirds of the U.S. medium/short grain crop. In the South, acreage is typically shifted among classes of rice--i.e., long, medium, and short--based on expected returns. Total use is projected at 207 million cwt in 2001/02, up 3 percent from a year earlier but almost 2 percent below the 1999/2000 record. Both domestic use and exports are projected higher in 2001/02. Total domestic use is projected at 121 million cwt, up 3 percent from a year earlier but fractionally below the 1999/2000 record. U.S. rice exports are projected to increase 3 percent to 86 million cwt, primarily due to more competitive U.S. prices. Milled and brown rice exports (on a rough basis) account for nearly all of the increase. U.S. milled rice exports are projected at 63 million cwt, up almost 4 percent from a year earlier. Rough rice exports are projected to increase fractionally to 23 million cwt, nearly 12 percent below the 1997/98 record. By class, long grain rice is projected to increase 7 percent, accounting for all of the export expansion. Combined medium/short grain exports are projected to decline 11 percent. Total ending stocks are projected at 42.2 million cwt, up more than 48 percent from a year earlier and the largest since 1986/87. The higher stocks are the result of a 9-percent increase in total supplies more than offsetting a 3-percent increase in total use. The stocks-to-use ratio is projected at 20.4 percent, well above a year earlier's 14.2 percent and the largest since 1992/93. Long grain accounts for all of the expected increase in ending stocks. Medium/short grain stocks are projected to decline. U.S. Long Grain Supplies Projected To Rise 19 Percent to Record U.S. long grain supplies are projected at nearly 183 million cwt, a record and up more than 19 percent from a year earlier. A 26- percent increase in production and slightly higher imports account for the record U.S. supplies. In contrast, long grain beginning stocks are almost 26 percent below a year earlier. Total long grain use is projected to increase more than 10 percent to more than 156 million cwt, just 1 percent below the 1999/2000 record. Both domestic use and exports of long grain rice are projected to be higher than a year earlier, a result of lower prices and record supplies. Long grain ending stocks are projected to increase 130 percent to 26.8 million cwt in 2001/02, the largest since 1986/87. The resulting stocks-to-use ratio is 17.2 percent, more than double a year earlier and the highest since 1992/93. U.S. long grain prices will be under substantial price pressure throughout the 2001/02 market year. The medium/short grain market faces a somewhat different outlook in 2001/02. Total medium/short grain supplies are projected to drop almost 14 percent to 65 million cwt. A 24-percent drop in production to 47.5 million cwt more than offset an almost 50- percent increase in beginning stocks to 15.6 million cwt. Imports, projected at 2 million cwt, are virtually unchanged from a year earlier. Total medium/short grain use is projected to drop 14 percent to 50.9 million cwt, the smallest since 1992/93. Both domestic use and exports are projected to decline in 2001/02. Medium/short grain domestic use is projected to drop more than 15 percent to 34.9 million cwt. Exports are projected to decline nearly 11 percent to 16 million cwt. The net result is a 9-percent drop in ending stocks to 14.1 million cwt. The stocks-to-use ratio is projected to rise slightly to 27.8 percent, the largest since 1992/93. The 2001/02 season-average farm price (SAFP) is projected at $4.00 to $4.50 per cwt, down from a year earlier's $5.56 and the lowest since 1986/87. This is the fifth consecutive year of declining SAFP in the United States. The price situation by grain type is expected to be different. Long grain prices have already declined from prices quoted at the start of the 2001/02 market year and are currently the lowest since 1986/87. For medium/short grain rice, U.S. prices began to strengthen late last spring in anticipation of a substantial drop in U.S. supplies this year. However, despite the recent strengthening, U.S. medium/short grain prices are only slightly higher than a year earlier and are quite low by historic comparison. U.S. prices for long grain milled rice are well below a year earlier. In late-November, prices for high quality southern long grain (U.S. No. 2, 4-percent brokens, fob mill in Houston) were quoted at $220 per ton, down $56 from August and the lowest since 1987. Prices for California medium grain milled rice (U.S. No. 1, 4-percent brokens, fob mill in Sacramento) were quoted at $287 per ton in late-November, up $67 from mid-September. Global Trade Projected Flat in 2002; Prices Remain Near 15-Year Low Since last April, international rice prices have been the lowest in 15 years, a result of bumper crops in most major exporting countries, and except for parts of the Middle East, no significant production problems in a major importing country. For 2002, global rice trade is projected at 23 million tons (milled basis), virtually the same as a year earlier and 17 percent below the 1998 record. Global rice production in 2001/02 is projected at 393.3 million tons (milled basis) down fractionally from a year earlier and almost 4 percent below the 1999/2000 record of 408.5 million tons. Despite the smaller crop there is little expectation of any price strengthening. This forecast assumes normal weather for the remainder of the 2001/02 market year. A major weather problem could alter this projection. Global rice prices remained relatively flat from April through mid- November, with quoted prices for Thai 100-percent Grade B averaging $175 per ton. This is the longest period that prices remained at this low of a level since the early 1970s. Since mid-November international prices have risen slightly, primarily due to higher prices for Vietnam's rice. Prices for Vietnam's 5-percent brokens, currently quoted at $192 per ton, are up more than $40 since early July due to a tight supply situation. China accounts for the bulk of this year's expected reduction in global rice production. However, China is expected to have plenty of supplies for both its domestic market and to expand exports. Other major exporters--Thailand, Vietnam, India, and the United States--are expected to produce record- or near-record crops in 2001/02. Drought reduced Pakistan's crop in 2001/02. With the exception of a severe drought in parts of the Middle East that has significantly reduced crops in Iran and Iraq, most major importers are expecting to harvest bumper crops in 2001/02. Global rice trade has essentially been flat at 23 million tons annually since 2000. For 2002, higher imports by Indonesia, Iran, Turkey, and Bangladesh are offset by weaker imports by Nigeria, the Philippines, and Saudi Arabia. For other major importers, such as Iraq, Japan, Brazil, and South Africa, trade is projected flat in 2002. For many importers, especially Indonesia, the Philippines, and Brazil, trade remains well below the 1998 record, a result of strong production recovery from the 1997/98 El Nino and large stocks accumulated in the late 1990s. On the export side, Vietnam, China, Australia, Egypt, and the United States are expected to ship more rice in 2002 than this year. In contrast, India, Argentina, Guyana, and Uruguay are expected to export less rice. For Pakistan and Thailand, exports are projected flat. With Australia and Egypt--top japonica exporters--projected to ship record or near-record levels of rice in 2002, the United States will likely face intense competition in the Eastern Mediterranean. Printed copies of the 2001 Rice Situation and Outlook Yearbook will be available in about 3 weeks. For more information contact Nathan Childs, 202-694-5292. This issue contains a special article describing the impact of Taiwan's accession to the World Trade Organization on the international rice market. The full text of the report will also be available electronically via the ERS website at www.ers.usda.gov. END_OF_FILE