RICE OUTLOOK July 13, 1998 July 1998, RCS-0498 Approved by the World Agricultural Outlook Board --------------------------------------------------------------------------- RICE OUTLOOK is issued six times a year by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. Electronic release only, no printed copies are available. --------------------------------------------------------------------------- MONTHLY HIGHLIGHTS: o The 1998 U.S. rice crop is projected at 189 million cwt (rough basis), up more than 3 percent from last month's projection and 6 percent larger than the 1997 crop--a result of expanded area and a higher 1998 yield. o The 1998/99 season-average price range was lowered to $8.50 to $9.50 per cwt from $9.20 to $10.20 last month, primarily due to the larger supplies. o U.S. rice exports for 1998/99 are projected at 85 million cwt, up 2 million from last month's projection and 1 million cwt greater than a year earlier. Rough rice exports are projected at 23 million cwt, slightly below the 1997/98 record of 25 million. o The 1998/99 U.S. stocks-to-use ratio is projected at 15.5 percent, up from 13.3 percent projected a month earlier and above a year earlier's 13.1 percent. Ending stocks are projected at 30.1 million cwt, an 18-percent increase from last month's projection--a result of the larger supplies--and more than 20 percent above a year earlier. o World rice production in 1998/99 is projected at a record 387.9 million tons (milled basis), up almost 1 million tons from last month's projection and more than 1 percent larger than the 1997/98 crop. Indonesia, the Philippines, Brazil, and Bangladesh are expected to produce larger crops. o World trade for 1999 is projected at 20.2 million tons--down nearly 14 percent from this year's record 23.4 million--primarily due to lower projected imports by Indonesia, Bangladesh, and the Philippines. Trade in 1999 would be the third highest on record. U.S. RICE CROP PROJECTED 6 PERCENT LARGER IN 1998 The 1998/99 rice crop is projected at 189 million cwt, up 3 percent from last month's projection and almost 6 percent larger than a year earlier. The 1998 crop would be the second largest on record, behind only the 197.8 million cwt 1994 crop. The month-to-month revision is due to a 4 percent increase in planted area to 3.215 million acres. Yield was actually reduced slightly from last month to 5,930 pounds per acre due to shifts in distribution of plantings by State and type of rice. The June Acreage report, the first survey of actual plantings for 1998, pegged 1998 plantings up 130,000 acres from the intended plantings reported in the March Prospective Plantings. The increase was due to relatively high prices for rice compared with virtually all alternative crops--most importantly soybeans, and to a lesser degree feed grains and wheat--this spring. While cash prices for rice remained strong during the second quarter, prices for soybeans, corn, and wheat were declining. And in May, while season-average prices for soybeans, corn, and wheat were projected to be lower in 1998/99, no price drop was projected for rice. The Acreage report indicated a 208,000-acre--or more than 9 percent--increase in long grain plantings from the March Prospective Plantings report to 2.504 million acres. Arkansas accounts for the bulk of the increase, with long grain plantings projected at 1.34 million acres, up 179,000 or more than 15 percent from the March report. Arkansas accounts for 53 percent of total U.S. 1998 long grain plantings. Louisiana posted a 10-percent increase in long grain plantings to 560,000 acres. Long grain will account for 95 percent of Louisiana's 1998 rice acreage, a record share. In contrast, long grain plantings in Mississippi were reported at 220,000 acres, down 20,000 acres from the March report. Although still a record, Missouri's long grain plantings were lowered 1,000 acres to 128,000. Long grain plantings remain projected at 250,000 acres in Texas and 9,000 in California. Medium grain plantings were lowered more than 10 percent from March to 689,000 acres, with reductions nearly evenly split between the South and California. Extremely wet weather this spring in California--which severely delayed seeding --was responsible for most of the 8 percent drop in California medium grain plantings from the March intentions to 452,000 acres. In the South, stronger prices for long grain compared with medium grain rice were behind a 9 percent drop in medium grain plantings in Arkansas to 200,000 acres and a 40 percent drop in Louisiana to 30,000. Short grain plantings--with California accounting for the bulk--are projected at 22,000 acres, up 2,000 from the March report. On a year-to-year basis, the June Acreage report indicates total planted area up 159,000 acres--or more than 5 percent--from 1997. Long grain was reported at 2.504 million acres, up 225,000 acres--or nearly 10 percent--and nearly tied with the 1981's record. Medium grain is projected at 689,000 acres, down 70,000 acres--or more than 9 percent--and the smallest since 1989. The decline in medium grain plantings was evenly split between California and the South, while all long grain expansion was in the South. Short grain plantings were reported up 4,000 acres to 22,000--the largest in a decade. Expanding sales to Japan are behind much of the recent expansion in short grain area. Arkansas accounts for the bulk of the year-to-year expansion, with plantings up 12 percent to 1.54 million acres, just barely below the State's 1981 record. All of the increase is for long grain; medium grain is down 9 percent. Louisiana posted a 40,000-acre increase to 590,000, with long grain accounting for all of the increase. Missouri's rice plantings were reported at a record 130,000, up 14 percent from 1997--with long grain accounting for all the expansion. In contrast, Mississippi--which grows only long grain--reported plantings at 220,000 acres, a 9 percent drop. And Texas, which has seen rice acreage steadily drop since 1980, reported area at 255,000 acres, down 2 percent from 1997. All of the decrease in Texas was for long grain which accounts for the bulk of the plantings in the State. Weak prices and severely delayed plantings are behind a 6 percent drop in California's rice plantings to 480,000 acres, the smallest since 1995. All of California's drop was for medium grain, which accounts for about 95 percent of the State's rice area. In contrast to the area expansion, the 1998 average yield--a 5-year-Olympic average (drop high and low) weighted by plantings by State and grain type and including a 1990-97 trend adjustment--is projected at 5,930 pounds per acre, down 50 pounds from last month but up slightly from 1997. The month-to-month revision is due solely to shifts in distribution of planted area by grain type and State. The first survey-based 1998 yield estimate will be made in August. Total U.S. supplies for 1998/99 are projected at 224 million cwt, up 3 percent from last month's forecast--primarily a result of the revised crop--and 4 percent larger than a year earlier. Total supplies would be second only to the 1994/95 record of 231 million cwt. Imports were revised up 250,000 cwt to a record 10 million based on higher 1997/98 imports. Carryin is projected at 25 million cwt, up slightly from last month's projection--a result of the higher 1997/98 imports--but still 8 percent below a year earlier. Harvest will begin by mid-July in Texas and Louisiana. To date, the pace of the U.S. crop is ahead of last year as well as the 5-year average. As of July 5, 17 percent of the crop had headed, compared with just 6 percent a year earlier and a 9 percent average. Much of the southern crop was planted early, which typically bodes well for yields. However, extremely hot, dry weather has been hanging over much of the southern rice belt, with some areas reporting drought. The lack of rain and rapid evaporation are raising water and irrigation costs and reducing the availability of surface water. Extreme heat can cause blanking and reduced milling yields. Results from the first cuttings this month and the August yield estimates will give stronger indications of the 1998 crop size. California planted extremely late this year, a result of excessive rain that prevented field preparations. This was a major factor in the California area reduction reported in June. STRONGER U.S. EXPORTS PROJECTED FOR 1998/99 U.S. exports in 1998/99 are projected at 85 million cwt, up 2 million cwt from last month's projection and 1 million higher than in 1997/98. The month-to-month revision is the result of the larger supplies and lower projected prices. Rough rice exports remain projected at 23 million cwt, only slightly below the 1997/98 record of 25 million cwt. Projections of strong rough rice sales in 1998/99 are primarily due to expectations of large rice imports by Brazil in the second half of 1998--a result of El Nino's damage to its 1998 crop. Brazil has already bought 300,000 tons of U.S. rough rice for delivery in 1998/99. Milled rice exports are projected at 62 million cwt, up 3 million cwt from 1997/98 and the first increase in milled exports since 1994/95. In recent years the U.S. has faced increasing price competition in international markets for milled rice from Asian exporters. Total use in 1998/99 is projected at 193.9 million cwt, up 1 percent from last month's projection--a result of the larger exports--and almost 2 percent higher than a year earlier. Total domestic use remains projected at 108.9 million cwt, up almost 2 percent from a year earlier. Food use--which accounts for all of the expansion in domestic use--remains projected at a record 84 million cwt, up 2 million from a year earlier. While continuing to expand, growth in food use has slowed from the pace set in the 1980's and first half of the 1990's. Long- term projections point to a slower growth rate as well, from nearly 4 percent annually earlier this decade to 2 to 3 percent for the next 10 years. Brewers' use remains projected at 15.4 million cwt, unchanged from the past 2 years. The stagnation is due to the growing popularity of "lite beers"--which use less rice than regular beers, declining per capita beer consumption, and competition from imports. Seed use--a function of next year's planted area--remains projected at 4 million cwt. Ending stocks for 1998/99 are projected at 30.1 million cwt, up 18 percent from last month's projection--a result of the larger supplies--and almost 21 percent greater than a year earlier. Ending stocks would be the largest since 1994/95 when production was a record. The stocks-to-use ratio is projected at 15.5 percent, up from 13.3 percent projected last month and above 1997/98's revised 13.1 percent. The larger stocks and higher stocks-to-use ratio are behind the lower projected season-average price. The 1998/99 long grain crop is projected at a record 135.5 million cwt, up almost 9 percent from last month's forecast--a result of the larger area--and 11 percent above a year earlier. Total supplies are projected at 156.3 million cwt--a record also--up 8 percent from both last month's projection and a year earlier. Total long grain use is projected to increase about 2 percent to 135 million cwt, as domestic use rises almost 2 percent to a record 69 million cwt and exports expand nearly 2 percent to 66 million. Ending stocks are projected at 21.3 million cwt, almost double last month's forecast and 80 percent larger than a year earlier. The long grain ending stocks-to-use ratio is projected at 15.8 percent, nearly double last month's projection and well above a year earlier's 8.9 percent. This is the highest long grain stocks-to-use ratio since 1992/93. A stocks-to-use ratio of this level will likely limit any significant price increase during the 1998/99 market year. The combined medium/short grain crop is projected at 53.5 million cwt, more than 8 percent below last month's forecast and nearly 7 percent smaller than a year earlier--a result of the reduced acreage. Both carryin and imports remain unchanged from a year earlier. Total supply is projected at 66.8 million cwt, down 7 percent from last month's projection and 5 percent below a year earlier. This is the smallest medium/short grain supply since 1992/93. Domestic use remains projected at 39.9 million cwt, up 2 percent from 1997/98. Exports are expected at 19 million cwt, up 500,000 tons from last month's projection and even with a year earlier. Ending stocks are projected to drop to 7.9 million cwt, down 41 percent from last month's projection and 36 percent below a year earlier. This would be the lowest medium/short grain stocks in over 16 years. The stocks-to-use ratio is projected at 13.4 percent, 41 percent below last month's projection and 37 percent below a year earlier. A stocks-to-use ratio this low should prevent any significant price drop during the 1998/99 market year. SEASON-AVERAGE FARM PRICE PROJECTED TO DROP IN 1998/99 The 1998/99 U.S. season-average farm price range is projected at $8.50 to $9.50 per cwt, down from last month's projection of $9.20 to $10.20--the result of substantially larger projected supplies matched with only a small increase in use. For 1997/98, the season-average farm price remains projected at $9.65, just 3 percent below 1996/97's $9.96--the highest since 1980/81. U.S. farm level prices for all rice have averaged about $9.67 per cwt since August 1997. Last month, USDA estimated June's midmonth price at $9.74 per cwt and raised May's to $9.41 from a preliminary $9.28. The June price increase and upward revision in the May price were likely the result of the large rough rice purchases by Brazil for 1998/99 delivery. Industry sources reported long grain prices at around $10.35 per cwt in Texas and slightly lower in the Delta in late June and early July, although marketings were extremely small. The California medium grain market is quiet as well. During most of the 1997/98 market year farm prices for California medium grain were at least $1.50 less per cwt less than quotes for southern long grain and have shown no significant strength since the start of the current market year. A record 1997 California crop and weaker U.S. medium grain exports are largely responsible for the lower prices. While typically a little below prices for long grain, southern medium grain prices have remained well above California medium grain prices throughout the 1997/98 market year. A major factor behind relatively strong farm prices in 1997/98 has been the record pace of U.S. rough rice exports. Rough rice exports remain projected at a record 25 million cwt in 1997/98, double a year earlier, with Latin America accounting for all of the increase. Through July 2, total exports and outstanding sales of rough rice exceeded 1.1 million tons. Mexico has already purchased over 350,000 tons, Colombia almost 300,000 tons, Ecuador and Costa Rice more than 100,000 tons, and Panama almost 85,000. Other major buyers have been: El Salvador, Honduras, Guatemala, Nicaragua, Turkey, and Brazil. Rough rice exports are projected to account for a record 30 percent of total U.S. rice exports in 1997/98. Several factors account for the expansion. First, weather-related difficulties affected crops in several Latin American countries, resulting in much greater imports. Some countries that do not typically import U.S. rice--Colombia, Ecuador, and Panama--have made sizable purchases this year due to production shortfalls. And other countries that regularly import U.S. rice--Honduras and El Salvador--are purchasing much larger amounts due to production difficulties. While not due to a crop shortfall, sales to Costa Rica are up as well. Second, many Latin American countries prefer to import rough rice instead of milled rice to better utilize milling capacity. They typically apply a lower tariff to rough rice imports than milled rice. The United States is one of very few rice exporting countries to allow rough rice exports. In fact, no major Asian rice exporter ships any significant quantities of rough rice. Total U.S. exports in 1997/98 are projected at 84 million cwt, up 7 percent from a year earlier. Greater supplies and the very strong Latin American demand for rough rice are responsible for the year-to-year export expansion. All of the projected increase is for long grain exports, which are projected at 65 million cwt, up 15 percent from 1996/97. In contrast, combined medium and short grain exports remain projected at 19 million cwt, down more than 13 percent. Little buying interest beyond Japan's minimum access purchases and a few other regular buyers such as Turkey and Jordan, plus a much smaller southern medium grain crop are behind the weaker exports. Total U.S. rice exports and sales commitments were more than 24 percent ahead of last year's pace through July 2, according to the U.S. Export Sales report of July 9, 1998. Primary destinations have been the EU, Mexico, Japan, Turkey, Saudi Arabia, Canada, Haiti, the Dominican Republic, Panama, Peru, Ghana, South Africa, Guatemala, Colombia, Costa Rica, El Salvador, Cote d'Ivoire, and Jordan. In contrast to the record pace of rough rice exports and sales, milled rice exports and sales were more than 1 percent behind a year earlier through July 2. Combined medium and short grain account for the slow pace of milled rice exports. As of July 2, medium and short grain exports and sales were 22 percent behind a year earlier while long grain milled exports and sales were almost 11 percent ahead. Total U.S. supplies for 1997/98 are projected at 215.9 million cwt, up slightly from last month's forecast--a result of the larger projected imports--and nearly 5 percent above a year earlier. Imports are forecast at 9.8 million cwt, up 300,000 cwt from last month's forecast--all long grain--based on deliveries through April. Ending stocks are projected at 25 million cwt, up slightly from last month's projection, but 8 percent below a year earlier. Total U.S. rice use remains projected at 190.9 million cwt in 1997/98, up 7 percent from a year earlier. The expansion is due to a projected 2-million-cwt increase in food use to 82 million cwt, plus the 7-percent increase in exports. Brewers' use remains projected at 15.4 million cwt, unchanged from 1996/97. The stocks-to-use ratio for 1997/98 is projected to be 13.1 percent, down from 15.2 percent a year earlier and the lowest since 1980/81. INTERNATIONAL PRICES CONTINUE TO RISE International prices for most grades of rice have risen since late March, due to a tightening of available supplies, continued large purchases by Indonesia and the Philippines, and some strengthening of the Thai baht. Several factors account for the tightness in supplies. First, Vietnam--which had halted making additional sales in April and May--has now set a maximum export quota of 600,000 tons for July through August to prevent overbookings. Second, Pakistan is sourced out of rice until its October/November harvest. China is unlikely to maintain the record pace it set in May and June. Finally, cyclone damage to India's main rice export port of Kandla--plus difficulties at other ports--has slowed India's exports as well. Quotes for high-quality Thai rice (100 percent, grade B, f.o.b. Bangkok) were reported at $343 per ton for the week ending July 6, up $3 from a week earlier and the highest since the devaluation last summer. Prices averaged $338 in June, $328 in May, and $326 in April. In contrast, prices were barely over $300 per ton in February and March. International prices began to slide in July when Thailand allowed its currency to float (leading to substantial depreciation vis-a-vis the U.S. dollar). The Thai currency generally depreciated during the summer and fall, causing rice prices to drop. Although the Thai currency continued to fall in December and early January, prices began rising slowly in late December when Indonesia and the Philippines began purchasing large quantities of rice in response to production difficulties. Through June, Indonesia had purchased 4 to 4.5 million tons, mostly from Thailand and Vietnam. The Philippines has purchased at least 1.5 million tons, also mostly from Vietnam and Thailand. Like Thai prices, Vietnam's rice prices strengthened in June--$5 to $10 per ton for 15-percent brokens and higher quality shipments. Quotes for Vietnamese 5- percent brokens averaged $305 per ton in June, up from $295 in early April--just prior to the suspension of new sales--and from $280 in March. Prices dropped to $300 per ton in early July in response to lower Indian prices. Prices for similar type and quality U.S. long grain rice--No. 2, 4-percent brokens, offer quotes f.o.b. Houston--have remained at $408 per ton since dropping from $419 in March. The high premium over Thai price for comparable grades has prevented any upward pressure on U.S. long grain milled prices. While high by historical standards, the U.S. price premium over Thai rice has steadily narrowed since December. In early July the premium was $68 per ton-- down from $70 in June and the lowest in 18 months. The premium had been as high as $158 in November and $144 in December when the Thai price reached its recent bottom. The premium has narrowed as the Thai price has strengthened. Several years ago, U.S. rice had been viewed as competitive in world markets with a premium of $30-$50 over Thai rice. However, in recent years this level has likely risen due to some shifting of U.S. exports to the Western Hemisphere-- where Thailand competes in few markets. Prices for high-quality California medium grain rice (No. 1, 4-percent brokens, 100 pound bags, f.o.b. Sacramento) rose to $397 per cwt in early June, up from $386 since mid-March. The recent increase was due to large sales of milled rice to Turkey. Medium grain milled prices had shown no prior price strength in 1997/98, a result of a record California crop and little buying interest beyond Japan's minimum access purchases and some sales to regular buyers such as Turkey and Jordan. Japan has agreed to purchase 608,000 tons (milled basis) in 1998/99 (April-March) under the WTO minimum access agreement, up from 530,000 tons in 1997/98. The U.S. has supplied 50 percent of Japan's minimum access imports since 1995/96. RECORD GLOBAL PRODUCTION PROJECTED FOR 1998/99 For 1998/99, world rice production is projected at a record 387.9 million tons (milled basis), up slightly from last month's projection and more than 1 percent larger than the revised 1997/98 crop. World consumption is projected to be a record 387.8 million tons, up slightly from last month's projection and more than 1 percent above a year earlier. With consumption almost matching production, ending stocks are projected to be virtually unchanged at 52.1 million tons. The stocks-to-use ratio is projected at 13.4 percent, down slightly from a year earlier and low enough to make prices sensitive to any crop shortfall in a major consuming or producing country. The primary factor behind the projected record production in 1998/99 is expectations of a return of normal weather in Southeast Asia and Latin America. Shortfalls in production in several countries in these two regions were responsible for the record 1998 trade. Indonesia will account for the bulk of the production increase. Indonesia's crop is projected to rise 2.1 million tons from 1997/98 to 33 million due to greater area and slightly higher yields. The crop would still be slightly below the record 33.2-million-tons in 1995/96. Bangladesh is projected to produce a record 19-million-ton crop, up 775,000 tons as area and yield both rebound. The Philippines, whose 1997/98 crop was down nearly 8 percent, is projected to produce a 7.15-million-ton crop, up 7 percent from 1997/98 but still below the 1996/97 record. Higher area and yield are behind the larger crop. In Latin America, Brazil's crop is projected at 6.66 million tons, up 864,000 as area and yield rebound from this year's weak crop. The region's principal exporters, Argentina and Uruguay, are expected to produce larger crops as well. Argentina's 1998/99 crop is projected at 815,000 tons, up 230,000 from 1997/98's flood-damaged crop. Both area and yield are projected higher. Uruguay, whose crop was not damaged as much as Argentina's, is projected to produce 680,000 tons of rice, up 80,000, with both area and yield rebounding from severe flood damage this year. Ecuador, whose 1996/97 and 1997/98 crops were reduced by El Nino, is projected to produce a 480,000-ton crop, up 180,000 tons as both area and yield rebound from severe flood damage. Guyana, a small exporter, is projected to produce 295,000 tons, up 45,000 from this year's drought damaged crop. Panama, Paraguay, and the Dominican Republic are expected to produce larger crops in 1998/99. In contrast, smaller crops are projected for several countries. Japan's crop is projected to drop 8.3 million tons, down 823,000 from 1997/98, as area continues to decline largely due to area diversion programs. South Korea's crop is projected to drop 250,000 tons to 5.2 million due to a small drop in area. Both Japan and Korea have agreed to increase imports under the WTO. Several exporters are projected to have slightly smaller crops also. The Thai crop is projected to contract 100,000 tons to 14.6 million as area drops slightly in response to lower expected prices. Australia's crop is projected to drop 50,000 tons to 900,000 on expectations of a return to trend yields outweighing a small area expansion. China's 1998/99 crop is projected at 140 million tons--unchanged from the 1997/98 record--even though area is expected to decline slightly. India's crop is projected at 83.5 million tons--steady with the 1997/98 record--a result of a slight area expansion and return to trend yields. For 1997/98, the world rice crop is projected at 383.5 million tons, up slightly from last month's forecast and 1 percent above a year earlier. The month-to-month revision is primarily due to a 200,000-ton increase in Thailand's crop to a record 14.7 million based on expectations of higher second crop yields. In addition, Nicaragua's crop was revised up 58,000 tons to 143,000--virtually the same as 1996/97--a result of revisions in several years' data. Costa Rica's crop was revised up 15,000 tons to 165,000--identical to 1996/97--a result of slightly higher area. Consumption in 1997/98 is projected at 382.6 million tons, down slightly from last month's forecast and about 1 percent greater than a year earlier. Indonesia accounted for most of the month-to-month reduction. The smaller consumption led to a 1-percent increase in ending stocks from a month earlier to 52 million tons. This yields a stocks-to-use ratio of 13.6 percent, about the same as a year earlier. Although El Nino caused significant crop damage in several major rice producing countries in 1997/98, several countries are projected to produce record crops. China's 1997 record 140-million-ton crop (milled basis) is up more than 3.4 million tons from a year earlier. India is projected to produce 83.5 million tons of rice, up 2.2 million tons from 1996/97. The Thai crop and Pakistan's 4.36-million-ton crop are records to date as well. In sharp contrast to these record crops, several major producers experienced El Nino-related difficulties, accounting for much of this year's record import prospects. Indonesia's 1997/98 crop is projected at 30.9 million tons, down more than 3 percent from a year earlier. Similarly, the Philippines' 6.7- million-ton crop is down nearly 8 percent from a year earlier. Bangladesh's 18.2-million-ton projected crop is down more than 3 percent. Brazil's 5.8- million-ton crop is down more than 10 percent from 1996/97. These four countries account for the bulk of the increase in 1998 imports. Smaller crops are projected for several exporters in 1997/98 as well. Vietnam's crop is projected down 200,000 tons from a year earlier, a result of drought stress to the second crop. Guyana's crop is down 46,000 tons due to drought also. Severe flooding in the cone of South America reduced Argentina's crop 25 percent and Uruguay's 16 percent from 1996/97. These two countries together typically account for most of Brazil's imports. GLOBAL 1999 RICE TRADE PROJECTED TO DROP TO 20.2 MILLION TONS Global 1999 rice trade is projected at 20.2 million tons, down 14 percent from 1998's revised record 23.4 million. Trade would be the third largest on record. An expected return to normal weather in Southeast Asia and Latin America is behind the smaller trade forecast, as the 1997/98 El Nino cut crops in several countries--leading to record trade. Indonesia accounts for the bulk of the reduced imports. Indonesia's imports are projected at 1.5 million tons-- still sizable by world standards--but down 3.5 million from 1998's record, a result of the larger projected crop. Similarly, the Philippines is projected to import 900,000 tons, down from 1.75 million this year as production rebounds from the reduced 1997/98 crop. Bangladesh is projected to import just 350,000 tons, down from a million in 1998--a result of a record crop. Yet, while Brazil's crop is projected to increase substantially, imports are projected to drop only 200,000 tons to 1 million. Brazil has been a sizable importer for a decade as production has not kept pace with use. In contrast to these reductions, imports by several countries are projected to expand. Iran--with no increase in production projected--is expected to import 1 million tons, up 200,000. Guinea is projected to import 350,000 tons--up 150,000--a result of a smaller 1998/99 crop. Nigeria--one of the largest markets for parboiled rice--is projected to import 750,000 tons, up 150,000 from 1998. While Nigeria's crop is projected to post a slight increase in 1998/99, production remains well below peak levels achieved early in the decade. Iraq is projected to expand imports 100,000 tons to 700,000 as production--which accounts for only a small share of use--remains steady. Even with a record crop, China's 1999 imports are projected to rise 25 percent to 500,000 tons, mostly Thai fragrant rice for urban consumers. Finally, Japan is projected to increase imports in 1998, a result of the WTO agreement. On the export side, Asia will export less as this year's record pace has pulled stocks down. A smaller crop is expected to reduce Thailand's exports to 5.7 million tons, down 300,000 from 1998's revised level. A steady crop and rising consumption are behind a 750,000-ton drop in China's exports to 1.75 million tons. India's exports are projected to drop 1 million tons to 1.5 million, a result of no growth in production and expanding domestic use. Vietnam's exports are projected to marginally drop to 3.5 million tons from this year's record 3.6 million, as the country rebuilds stocks. Some stock rebuilding is behind Pakistan's projected drop in exports to 1.75 million tons, a 250,000-ton decrease. Australia is projected to export 625,000 tons--down 75,000 from 1998 --the result of a smaller projected crop. In contrast, exports from South America will up in 1999. Argentina is projected to export 550,00 tons, up 37 percent from 1998. Uruguay's exports are projected to rise 14 percent to 600,000 tons. Finally, Guyana is projected to post a 25,000 ton increase in exports to 175,000. Crops in all three countries are projected to rebound from 1997/98 reduced levels. Global rice trade is projected at a record 23.4 million tons (milled) in 1998, up slightly from last month's projection and almost 24 percent higher than 1997. The month-to-month increase in exports is largely due to a 200,000-ton increase in Thailand's exports to 6 million tons--based on the pace of sales to date. On the import side, the Philippines are projected at import 1.75 million tons--up 250,000 from last month--a result of continued buying. This report is available on the Internet at the ERS Home Page at: http://www.econ.ag.gov Note: To order printed copies of the 1997 Rice Yearbook call 1-800-999-6779. ****************************************************************************** * INFORMATION CONTACT AT THE ECONOMIC RESEARCH SERVICE: * * Nathan Childs (202) 694-5292* * The next Rice Outlook will be available on August 13, 1998. * ****************************************************************************** Detailed 1998/99 foreign supply and use forecasts will be published on August 14, 1998 in the Foreign Agricultural Service's Grain: World Markets and Trade. Tables: Table 1- U.S. rice supply and use, 1992/93 to present Table 2- U.S. monthly average farm prices and marketings, 1995/96 to present Table 3- USDA calculated world market rice prices, 1995/96 to present Table 4- U.S. exports and sales commitments, 1992/93 to present Table 5- U.S. and Thailand f.o.b. export prices, 1986/87 to present Table 6- U.S. rice supply and use, by type, 1992/93 to present Table 1- U.S. rice supply and use, 1992/93 to present 1/ ============================================================================== | 1997/98 1998/99 Item | 1992/93 1993/94 1994/95 1995/96 1996/97 2/ 3/ ============================================================================== | | TOTAL RICE | Percent | | | ARP | 0 5 0 5 N/A N/A | N/A | | Area | Million acres | | | Planted | 3.176 2.920 3.353 3.121 2.819 3.056 |3.215 Harvested | 3.132 2.833 3.316 3.093 2.799 3.034 |3.187 | | | Pounds per harvested acre | | | Yield | 5,736 5,510 5,964 5,621 6,121 5,896 |5,930 | | | Million hundredweight | Beginning | | stocks | 27.4 39.4 25.8 31.3 25.0 27.2 | 25.0 Production | 179.7 156.1 197.8 173.9 171.3 178.9 |189.0 Imports | 6.1 6.9 7.3 7.4 10.0 9.8 | 10.0 Total supply | 213.2 202.5 230.9 212.6 206.3 215.9 |224.0 | | Food | 69.0 71.2 74.0 77.0 80.0 82.0 | 84.0 Seed | 3.8 4.3 4.1 3.7 4.0 4.0 | 4.0 Brewers' use | 15.1 14.3 14.5 15.6 15.4 15.4 | 15.4 Residual 4/ | 8.8 11.7 8.2 8.3 1.3 5.5 | 5.5 Domestic use | 96.7 101.5 100.7 104.6 100.7 106.9 |108.9 | | Exports | 77.0 75.3 98.9 83.0 78.4 84.0 | 85.0 Rough | 5.2 3.5 17.7 10.6 12.6 25.0 | 23.0 Milled 5/ | 71.8 71.8 81.2 72.4 65.9 59.0 | 62.0 Total use | 173.7 176.7 199.6 187.6 179.1 190.9 |193.9 | | Ending | | stocks | 39.4 25.8 31.3 25.0 27.2 25.0 | 30.1 CCC stocks | 0.1 0.0 0.1 0.0 0.0 0.0 | 0.0 Free stocks | 39.3 25.8 31.2 25.0 27.2 25.0 | 30.1 | | | Percent | Stocks-to- | | use ratio | 22.7 14.6 15.7 13.3 15.2 13.1 | 15.2 | | | $/cwt |$8.50 Average farm | | to price 6/ | $5.89 $7.98 $6.78 $9.15 $9.96 $9.65 |$9.50 | | | Percent | Average | | milling rate | 70.0 74.0 74.1 71.6 70.3 72.0 | 72.0 ============================================================================== N/A = Not applicable under current farm legislation. 1/ Marketing year (August 1 to July 31); rough equivalent of rough and milled rice. 2/ Forecast. 3/ Projected. 4/ Residual: unreported use, processing losses, and estimating errors. 5/ Rough equivalent. 6/ Marketing year weighted average price received by farmers. Table 2- U.S. monthly average farm prices and marketings, rough equivalent, 1995/96 to present ============================================================================== | 1997/98 1996/97 1995/96 | --------------------- ------------------- ------------------- Month | $/cwt 1,000 cwt $/cwt 1,000 cwt $/cwt 1,000 cwt ============================================================================== | August | 9.94 9,177 10.10 10,520 7.77 10,149 September | 9.85 12,204 10.00 13,478 8.01 11,743 October | 10.00 11,925 9.66 11,988 8.84 12,343 November | 9.71 11,191 9.41 11,768 9.21 12,941 December | 9.67 12,540 9.82 12,758 9.45 13,506 January | 9.52 13,416 9.95 15,927 9.36 13,405 February | 9.66 10,679 10.10 12,086 9.19 12,235 March | 9.55 10,474 10.20 10,133 9.20 14,690 April | 9.30 10,802 10.30 9,902 9.35 13,279 May | 9.41 10,357 10.20 7,969 9.73 11,702 June | 9.74 1/ 11,277 1/ 9.90 7,092 9.77 10,275 July | 10.10 9,421 9.81 10,782 | Average 2/ | 9.67 11,277 9.96 11,087 9.15 12,254 | Total 3/ | 9.65 4/ 124,042 133,042 147,050 | ============================================================================== 1/ Preliminary midmonth price estimate. 2/ Price is marketing year weighted average; 1997/98 is for August to current month. 3/ Total volume marketed; 1997/98 is August to date only. 4/ USDA price range. Table 3- USDA calculated world market rice prices, 1995/96 to present 1/ ============================================================================== | 1997/98 1996/97 1995/96 Month | -------------------- -------------------- -------------------- | Long Medium Short Long Medium Short Long Medium Short ============================================================================== | | $/cwt | August | 8.45 7.24 7.12 7.79 7.93 7.63 7.93 6.22 6.06 September | 7.89 7.39 7.24 7.66 7.89 7.60 8.02 6.30 6.13 October | 8.00 7.59 7.44 7.48 7.82 7.52 8.81 6.67 6.51 November | 8.20 7.63 7.48 7.18 7.67 7.37 8.47 6.82 6.63 December | 8.34 7.71 7.56 7.25 7.71 7.41 8.17 7.16 6.95 January | 8.76 7.80 7.67 7.54 7.74 7.48 8.11 7.19 7.13 February | 9.41 7.88 7.72 7.72 7.67 7.53 7.90 7.49 7.67 March | 9.50 7.86 7.70 7.43 7.59 7.45 7.97 7.38 7.55 April | 9.80 7.91 7.76 7.14 7.26 7.12 7.68 7.25 7.42 May | 8.79 7.81 7.63 8.38 7.21 7.10 7.38 7.17 7.35 June | 9.19 7.91 7.74 8.51 7.11 7.00 7.64 7.42 7.60 July | 8.58 6.93 6.83 7.79 7.82 8.01 | Average 3/| 8.76 7.70 7.55 2/ 7.71 7.53 7.33 7.99 7.07 7.08 ============================================================================== 1/ Loan rate basis (rough); the repayment rate was the lower of the loan level for the crop or the higher of the prevailing world market price or the minimum repayment level. For the 1989 through 1995 crops, the minimum loan repayment levels were 70 percent of the loan level. The minimum loan repayment level has been eliminated for 1996-crop loans, and loans are repayable at the lower of the loan level or the prevailing world price. 2/ Preliminary. 3/ Simple average of weekly announced world market price. Table 4- U.S. exports and sales commitments, 1992/93 to present 1/ ============================================================================== | 1997/98| 1996/97 | Country |--------|-------- 1996/97|1995/96 1994/95 1993/94 92/93 or | as of | as of | region | 7/2/98 | 7/2/97 Final | Final Final Final Final ============================================================================== 1,000 metric tons European Union | 370 | 396 342 | 417 474 362 391 Other Western Europe | 20 | 16 16 | 19 22 17 22 Turkey | 130 | 215 202 | 187 259 67 191 Eastern Europe | 0 | 4 4 | 34 58 10 46 Former Soviet Union | 2 | 23 23 | 37 18 4 15 | | | Japan | 250 | 214 212 | 192 2 568 0 | | | OTHER ASIA AND | | | THE MIDDLE EAST | 222 | 314 315 | 344 525 347 438 Iran | 0 | 0 0 | 72 191 121 130 Iraq | 0 | 0 0 | 0 0 0 0 Saudi Arabia | 136 | 169 168 | 130 153 157 205 Jordan | 41 | 56 22 | 56 62 1 33 Syria | 11 | 24 25 | 1 28 0 0 | | | AFRICA | 172 | 204 205 | 324 257 257 315 South Africa | 67 | 114 114 | 147 113 90 111 Cote d'Ivoire | 31 | 31 31 | 82 57 67 92 Ghana | 64 | 33 33 | 48 7 0 11 | | | WESTERN HEMISPHERE | 1,708 | 938 934 | 1,010 1,585 513 663 Canada | 123 | 115 109 | 107 127 91 98 Colombia | 297 | 34 34 | 28 0 0 0 Costa Rica | 101 | 55 55 | 110 65 46 18 Dominican Republic | 93 | 19 19 | 3 40 0 0 Ecuador | 144 | 0 0 | 0 0 0 0 El Salvador | 51 | 22 22 | 30 37 5 6 Guatemala | 25 | 32 32 | 31 23 5 15 Haiti | 92 | 86 86 | 121 148 43 117 Honduras | 62 | 49 52 | 30 29 1 2 Jamaica | 26 | 28 28 | 80 74 63 30 Mexico | 386 | 308 309 | 318 327 177 249 Nicaragua | 28 | 68 68 | 29 39 0 22 Panama | 88 | 0 0 | 0 0 0 0 Peru | 96 | 46 46 | 36 77 3 34 Trinidad | 23 | 21 21 | 27 34 21 34 | | | Total | 2,894 | 2,325 2,254 | 2,564 3,201 2,149 2,075 ------------------------------------------------------------------------------ Census Bureau 2/ |2,740 4/| 2,500 4/| 2,790 3,723 2,521 2,673 Difference 3/ | 344 5/| | 226 522 372 598 ============================================================================== Note: U.S. Export Sales reports sales and shipments in product weight.The milled equivalent total may vary significantly from year to year based on the share of rough rice exports. 1/ Columns labeled "Final" represent final exports as reported by the "U.S. Export Sales," FAS, USDA. Columns labeled "as of" represent combined exports plus sales commitments. 2/ The U.S. Census Bureau rice export total (reported on a product-weight basis) is the official export total. 3/ The "U.S. Export Sales" report does not include U.S. Government exports under PL 480 Titles II and III, Section 416, and Food for Peace exports. 4/ USDA forecast, milled equivalent basis. 5/ The average difference between exports reported by the U.S. Census Bureau and exports reported in "U.S. Export Sales" for 1992/93 to 1995/96. Table 5- U.S. and Thailand f.o.b. export prices, 1986/87 to present ============================================================================= | U.S. 2/ Bangkok, long grain 5/ Month | -------------------------- --------------------------------------- or | Long Medium Par- market | grain 3/ grain 4/ boiled 100% 5% par- 15% 35% A-1 year 1/ | Houston Calif. Houston grade B boiled brokens brokens special ============================================================================== | $/metric ton 7/ | 1986/87 | 240 282 311 190 171 173 154 122 1987/88 | 422 366 485 273 261 256 236 204 1988/89 | 323 361 386 292 276 275 256 232 1989/90 | 342 352 400 292 259 262 220 172 1990/91 | 331 347 400 296 270 261 214 165 | 1991/92 | 368 384 418 287 263 258 222 184 1992/93 | 322 383 348 244 227 217 193 163 1993/94 | 439 451 470 294 244 243 209 160 1994/95 | 314 375 349 290 276 270 255 232 1995/96 | 414 445 456 362 344 335 302 265 | Aug '96 | 446 441 491 346 330 314 265 213 Sep '96 | 452 441 478 341 331 311 264 216 Oct '96 | 449 433 474 324 330 293 250 208 Nov '96 | 438 430 463 325 327 293 248 206 Dec '96 | 430 430 463 330 325 298 253 205 Jan '97 | 435 424 474 367 334 332 277 218 Feb '97 | 455 402 485 359 321 320 270 226 Mar '97 | 463 397 485 341 315 302 261 231 Apr '97 | 463 397 485 319 301 285 252 220 May '97 | 463 397 485 335 315 300 257 215 Jun '97 | 463 397 485 335 324 299 255 221 Jul '97 | 446 397 485 332 327 296 256 215 | 1996/97 | 450 415 479 338 323 303 259 216 | Aug '97 | 430 397 474 296 314 265 237 209 Sep '97 | 419 397 463 280 304 254 231 203 Oct '97 | 419 397 463 275 280 249 224 192 Nov '97 | 419 397 463 261 261 237 213 181 Dec '97 | 419 397 463 274 269 255 233 203 Jan '98 | 419 397 463 299 279 278 236 186 Feb '98 | 419 397 463 307 290 279 235 187 Mar '98 | 410 392 445 306 284 278 235 193 Apr '98 | 408 386 441 326 296 296 249 199 May '98 | 408 395 441 328 299 299 248 197 Jun '98 | 408 396 441 338 315 311 256 209 Jul '98 | 408 396 441 343 316 312 258 210 | 97/98 8/| 416 395 455 303 292 276 238 197 ============================================================================== 1/ Simple average of weekly price quotes. 2/ Lowest quote offered. 3/ Number 2, 4 percent brokens. 4/ Number 1, 4 percent brokens. 5/ Nominal price quotes collected by the U.S. Embassy, Bangkok. 6/ 100 percent broken. 7/ Bagged, f.o.b. mills. 8/ Preliminary. Table 6- U.S. rice supply and use, by type, 1992/93 to present 1/ ============================================================================== | 1997/98 1998/99 Item | 1992/93 1993/94 1994/95 1995/96 1996/97 2/ 3/ ============================================================================== LONG-GRAIN | Million acres | Planted | 2.408 2.102 2.410 2.335 1.980 2.279 Harvested | 2.372 2.028 2.379 2.312 1.964 2.261 | | Pounds per harvested acre | Yield | 5,397 5,082 5,609 5,265 5,777 5,380 | | Million hundredweight Beginning | stocks | 13.0 21.6 15.1 14.4 10.1 14.1 11.8 Production | 128.0 103.1 133.4 121.7 113.5 121.6 135.5 Imports | 5.4 5.9 6.3 6.3 8.7 8.8 9.0 Total supply | 146.4 130.6 154.8 142.4 132.3 144.6 156.3 | Domestic | use 4/ | 59.0 59.9 60.1 67.4 61.7 67.8 69.0 Exports | 65.8 55.6 80.3 64.9 56.5 65.0 66.0 Total use | 124.8 115.5 140.4 132.3 118.2 132.8 135.0 | Ending stocks | 21.6 15.1 14.4 10.1 14.1 11.8 21.3 | | Percent Stocks-to- | use ratio | 17.3 13.0 10.3 7.6 12.0 8.9 15.8 ------------------------------------------------------------------------------ --continued Table 6- U.S. rice supply and use, by type, 1991/92 to present--continued 1/ ============================================================================== | 1997/98 1998/99 Item | 1992/93 1993/94 1994/95 1995/96 1996/97 2/ 3/ ============================================================================== MEDIUM & SHORT-GRAIN | Million acres | Planted | 0.768 0.818 0.943 0.786 .839 0.777 Harvested | 0.760 0.805 0.937 0.781 .835 0.773 | | Pounds per harvested acre | Yield | 6,795 6,590 6,866 6,676 6,929 7,406 | | Million hundredweight Beginning | stocks | 12.9 15.8 10.0 15.8 14.3 12.1 12.3 Production | 51.6 53.0 64.3 52.1 57.9 57.2 53.5 Imports | 0.7 1.0 1.0 1.2 1.2 1.0 1.0 Total supply | 64.8 71.2 75.0 69.5 73.1 70.4 66.8 | Domestic | use 4/ | 37.7 41.6 40.6 37.2 39.0 39.1 39.9 Exports | 11.2 19.6 18.6 18.1 21.9 19.0 19.0 Total use | 48.9 61.2 59.2 55.3 60.9 58.1 58.9 | Ending stocks | 15.8 10.0 15.8 14.3 12.1 12.3 7.9 | | Percent Stocks-to- | use ratio | 32.4 16.3 26.7 25.9 19.9 21.2 13.4 ------------------------------------------------------------------------------ | Million hundredweight Ending stocks | difference 1/ | 2.0 0.7 1.1 0.6 1.0 1.0 1.0 ============================================================================== 1/ Stock totals by type omit brokens, screenings, and brewers. These are included in the stock total for all types of rice in table 1. 2/ Forecast. 3/ Projected. 4/ Includes residual. END_OF_FILE