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Rice Outlook Summary

Core Content

This document provides a comprehensive overview of the U.S. and global rice market outlook for the 2016/17 season, including production, supply, export, and price forecasts, as well as international production and trade trends. It highlights the impact of weather conditions, market dynamics, and policy decisions on rice supply and demand.

Main Views

U.S. Domestic Outlook

• Production Forecast: The U.S. 2016/17 rice production is forecast at 236.0 million cwt, a 3.0 million cwt reduction from the previous forecast, but still 23% higher than the previous year and the second highest on record.
  • Long-grain production is forecast at 177.0 million cwt, down 0.9 million cwt but up 33% from the previous year.
  • Medium- and short-grain production is forecast at 59.0 million cwt, down 0.3 million cwt but 1% higher than the previous year.
• Harvest Progress: By October 9, 89% of the U.S. rice crop was harvested, ahead of last year's 85% and the 5-year average of 78%.
  • Arkansas: 96% harvested, up from 90% last year.
  • Missouri: 91% harvested, up from 80% last year.
  • California: 54% harvested, slightly behind the year-earlier pace but ahead of the 5-year average.
• Supply Forecast: U.S. 2016/17 rice supply is projected at 306.0 million cwt, a 1.2 million cwt reduction from the previous forecast, but still the highest on record, up 15% from the previous year.
  • Long-grain supply: 220.2 million cwt, down 0.9 million cwt but up 22% from the previous year.
  • Medium- and short-grain supply: 82.9 million cwt, down 0.3 million cwt but up 1% from the previous year.
• Ending Stocks: U.S. 2016/17 ending stocks are forecast at 61.0 million cwt, up 3% from the previous forecast and 31% from the previous year, the highest since 1985/86.
• Farm Prices: Both classes of U.S. rice are projected to have lower season-average farm prices (SAFP) in 2016/17 due to record supplies and declining global rice prices.
  • California medium- and short-grain prices: $14.50-$15.50 per cwt, the lowest since 2008/09.
  • Southern medium- and short-grain prices: $9.50-$10.50 per cwt, down 20 cents from last month.
  • U.S. long-grain prices: $9.20-$10.20 per cwt, below the $11.10 of 2015/16.
• Exports: U.S. 2016/17 rice exports are forecast at 112.0 million cwt, down 3.0 million cwt from the previous forecast but up 4% from the previous year.
  • Long-grain exports: 79.0 million cwt, down 2.0 million cwt but up 3% from the previous year.
  • Medium- and short-grain exports: 33.0 million cwt, down 1.0 million cwt but up 6% from the previous year.
  • Milled rice exports: 72.0 million cwt, down 4.0 million cwt but up 4% from the previous year.
  • Rough rice exports: 40.0 million cwt, up 1.0 million cwt and 5% from the previous year.
  • Export Market Expansion: The U.S. needs to expand exports to Sub-Saharan Africa and the Middle East to meet export targets.

International Outlook

• Global Production: Forecast at 483.3 million tons, a 1.5 million ton increase from the previous forecast and 2% higher than the previous year.
  • Record global area: 162.2 million hectares, up 3.0 million hectares from the previous year.
  • Major contributors to area expansion: India, Thailand, and the U.S. account for over 60% of the increase.
• Production Revisions:
  • Thailand: Increased 1.6 million tons to 18.6 million tons, up 7% from the previous year due to favorable rainfall.
  • Australia: Increased 0.2 million tons to 662,000 tons, up 268% from the previous year due to increased irrigation availability.
  • Egypt: Increased 554,000 tons to 4.6 million tons, up 16% from the previous year due to increased rice area.
  • Sri Lanka and Brazil: Reduced production forecasts by 340,000 tons and 475,000 tons, respectively.
• Global Consumption: Forecast at 478.2 million tons, a 0.6 million ton reduction from the previous forecast but 1% higher than the previous year.
  • Consumption Revisions: Lowered for Thailand, Indonesia, and China, and raised for Pakistan and Vietnam.
• Global Ending Stocks: Forecast at 120.7 million tons, up 4% and 5.1 million tons from the previous year, the highest since 2001/02.
  • Thailand: Ending stocks nearly doubled to 6.6 million tons.
• Trade Forecasts:
  • 2017 Global Trade: Projected at 41.1 million tons, the first increase since 2014.
  • Upward Revisions: India and Thailand increased exports, while Vietnam and Pakistan decreased.
  • Downward Revisions: Brazil and the U.S. reduced exports due to weaker sales and smaller supplies.
  • Import Revisions: Egypt, Benin, Mozambique, and Brazil increased imports, with Egypt's imports up 200% from this year.

Key Information

• U.S. Production: Lowered due to reduced Arkansas yields but still up 23% from the previous year.
• U.S. Supply: Remains the highest on record at 306.0 million cwt, driven by increased area and yields in California and Texas.
• U.S. Exports: Lowered by 3.0 million cwt to 112.0 million cwt, but still up 4% from the previous year.
• U.S. Prices: Declined across both rice classes due to high supply and global price trends.
• Global Production: Increased to a record level, driven by expanded area and higher yields in several countries.
• Global Consumption: Increased slightly, but Thailand, Indonesia, and China saw reductions in consumption.
• Global Ending Stocks: Reached a record high of 120.7 million tons, up 4% from the previous forecast.
• Global Trade: Expected to rise in 2017, driven by lower prices and abundant supplies.

Summary

The 2016/17 U.S. rice market is characterized by higher production and supply, lower export forecasts, and declining farm prices. Despite the downward revisions in exports, the U.S. is still expected to have higher exports than the previous year, with a focus on expanding into Sub-Saharan Africa and the Middle East. Globally, rice production and supply have reached record levels, with Thailand, Australia, and Egypt leading the increase in production. Global consumption has also increased, but Thailand, Indonesia, and China have seen the largest reductions. The global ending stocks are at the highest since 2001/02, and global trade is expected to rise in 2017, primarily due to lower prices and increased supplies.