Global Markets: Rice – Record Production Forecast

Global rice production in 2018/19 is forecast at a record, up modestly from the prior year on greater area. The largest year-to-year increase is for Bangladesh, which is expected to recover from recent drought and untimely floods. Both area and yield are expected to return to more normal levels.

Likewise, Indonesia is projected to produce more with a slightly higher yield. For Thailand, an increase in double-cropping will lead to more production.

The United States is forecast to have larger planted area, particularly for long-grain rice. These gains are partially offset by reductions for the two largest-producing countries.

Production in China is forecast lower, as reduced minimum support prices lead to lower planted area. Production in India is forecast down on a return to trend yield.

The crop in Egypt is expected to be sharply lower on account of anticipated enforcement of the planted area limitations set by the government.

World consumption is set to increase slightly by 1 percent. The largest increase in consumption is forecast for China, the top consumer, while the biggest decline is for Thailand where old crop rice for feed and industrial use has dwindled as stocks decline.

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Food use accounts for the bulk of rice consumption. In some regions where rice per capita consumption has traditionally been high, particularly in Asia, people are consuming less rice as their diets diversify.

In contrast, in many African countries, rice consumption is rising especially in urban areas. A limited amount of rice is used for feed among rice producing countries, such as Thailand.

Global production continue s to exceed consumption, and therefore global 2018/19 ending stocks are projected to continue their upward trend. Ending stocks have increased every year for the past 11 years, though the expected increase in 2018/19 is smaller than in recent years.

As in recent years, China is primarily responsible for this growth. Its ending stocks are forecast to rise more than 3 million tons. Domestic policies have simultaneously led to burgeoning government reserves while also encouraging lower-priced imports from neighboring countries.

Consequently, China has the largest production, imports, and stocks in the world.

In contrast, India is forecast to reduce its stocks by 10 percent or 2 million tons. Other top exporters are forecast to see marginal changes in ending stocks, but India’s reduction will keep the trend downward for the top six exporters (India, Thailand, Vietnam, Pakistan, Burma, and United States).

Collectively, the top six exporters have been decreasing their ending stocks for the last 5 years. In contrast, this year U.S. ending stocks are forecast up sharply by 18 percent on higher production.

For 2019, trade is forecast up 1.2 percent to a record of nearly 50 million tons. The largest import demand growth is forecast in Sub- Saharan Africa, and the Middle East, whereas imports for both South and Southeast Asia are expected to decline. India will remain the top exporter, though its year-to-year decline is more than offset by projected gains for Thailand and China.

In the Western Hemisphere, U.S. exports are projected to rise, along with Paraguay, whereas Argentina is forecast flat and both Brazil and Uruguay are expected to decline.

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