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Rice Outlook Summary (RCS-16C, March 11, 2016)

Core Content Overview

This report provides an outlook for the U.S. and global rice markets for the 2015/16 season, highlighting changes in production, supply, use, and prices. It also includes updated forecasts for 2016 and international developments.

Key Points

U.S. Domestic Outlook

• Total Supplies: Forecast at 264.9 million cwt, down 5% from the previous year.
  • Long-grain: Declined 10% to 180.0 million cwt, primarily due to a smaller crop.
  • Medium- and short-grain: Increased 8% to 83.0 million cwt, driven by a large carry-in.
• Imports: Declined 3% to 24.0 million cwt for the 2015/16 season.
  • Long-grain: Forecast at 20.5 million cwt, 3% below a year earlier.
  • Medium- and short-grain: Forecast at 3.5 million cwt, up 1% from a year earlier.
• Ending Stocks: Increased to 43.9 million cwt, 10% below a year earlier.
  • Long-grain: 23.0 million cwt, down 13%.
  • Medium- and short-grain: 19.0 million tons, 6% below a year earlier.
• Prices:
  • Long-grain SAFP: Forecast at $11.00-$11.60 per cwt, down slightly from $11.90 a year earlier.
  • Medium- and short-grain SAFP: Lowered to $16.00-$16.80 per cwt, well below $18.30 a year earlier.
    • California: $18.50-$19.50 per cwt, down from $21.60 a year earlier.
    • South: $11.40-$12.00 per cwt, down from $14.40 a year earlier.
• Export Forecast: Lowered 2.0 million cwt to 100.0 million cwt for 2015/16.
  • Long-grain: 69.0 million cwt, down 2.5% from a year earlier.
  • Medium- and short-grain: 31.0 million cwt, down 2.0 million cwt from the previous forecast but up 5% from a year earlier.
• Market Trends:
  • U.S. long-grain exports were strong to Central America and Mexico but weak to Sub-Saharan Africa.
  • Medium- and short-grain exports were slow to the Middle East, especially Turkey.
  • The strong dollar and global competition contributed to lower prices.

International Outlook

• Global Production: Raised 1.6 million tons to 417.1 million tons, 2% below a year earlier, the smallest in 4 years.
  • India: Production forecast raised 3.0 million tons to 103.0 million tons due to higher yield in kharif areas.
  • Indonesia: Production forecast lowered 1.0 million tons to 35.3 million tons due to reduced area and delayed planting.
• Global Consumption: Raised 0.6 million tons to 484.2 million tons, the highest on record.
  • India: Accounted for nearly all the increase in consumption.
• Global Ending Stocks: Declined 13% to 90.5 million tons, the lowest since 2007/08.
  • Stocks-to-use ratio: 18.7%, down from 21.5% a year earlier.
• Import Forecasts:
  • China: Raised 0.3 million tons to 5.0 million tons, down 3% from a year earlier.
  • Indonesia: Raised 0.1 million tons to 2.0 million tons, up 67% from a year earlier.
  • Brazil: Import forecast increased due to stronger demand.
• Export Forecasts:
  • Cambodia and India: Raised exports for 2016.
  • China: Export forecast reduced due to slower shipment pace.
  • Global Trade: Raised slightly to 41.7 million tons, 2% below a year earlier.

Price Trends

• Thailand: Prices for most grades of regular milled white rice dropped about 2% over the past month.
  • Jasmine rice: $688 per ton, down $40 from a month earlier.
• Vietnam: Prices for double-water-polished milled rice increased 4%, due to concerns over potential crop losses.
• U.S.: Prices for long-grain milled and rough rice declined since early February.
  • Southern long-grain: $500 per ton, down $15 from a month earlier.
  • California medium-grain: Domestic prices dropped to $739 per ton, while export prices remained stable at $895 per ton.

Key Information Summary

• Supply and Use:
  • Total U.S. rice use in 2015/16 is forecast at 221.0 million cwt, down 1% from the previous forecast.
  • Total domestic and residual use is 7% below a year earlier.
• Factors Affecting Supply:
  • Smaller plantings and lower yields in the U.S. due to adverse weather.
  • A 52% increase in beginning stocks, primarily from carry-in.
• Global Market Trends:
  • Global production and consumption are expected to remain lower than the previous year.
  • Global ending stocks are projected to decline, reflecting a continued surplus.
• Market Dynamics:
  • U.S. exports are affected by competition, global supply, and the strong dollar.
  • Thailand and Vietnam have seen contrasting price movements.
  • India is projected to be the second-largest rice exporter in 2016.

Main Viewpoints

• The U.S. rice supply is expected to decline due to smaller production and weaker imports.
• Prices for U.S. long-grain and medium- and short-grain rice have declined, influenced by global market conditions and domestic supply.
• Global production and consumption are forecast to remain lower than the previous year, with India and Indonesia as key contributors.
• The global ending stocks are projected to decline, reflecting a tight market and increased consumption.
• Export and import forecasts for 2016 show mixed trends, with China and Indonesia leading import growth and Cambodia and India seeing export increases.