Brazil is the top Western Hemisphere rice producer and consumer. It is also a significant import market, and in fact a net importer as recently as 2016 and 2017. However, this year with more ample supplies, Brazil is reverting to its position as not only a net exporter but also as the top South American supplier to the global market.
Brazil is forecast to export 1 million tons (milled basis) in 2018, declining to 850,000 tons in 2019 on rising competition from Paraguay, Guyana, and Argentina. In the first 9 months of the year, nearly half of exports have been as paddy rice, challenging U.S. export opportunities in Venezuela, Costa Rica, and Nicaragua.
Brazilian milled rice is mostly shipped to Latin America, whereas broken rice is destined for West Africa.
Record Egyptian Rice Imports amid Smallest Crop in 20 Years
Egypt is facing the prospect of record rice imports as a consequence of strictly enforced limitations on area permitted for rice cultivation. Historically, Egypt has cultivated rice along the Nile Delta region, and until recently was a net exporter. However, as a result of concerns about water usage, the government set and enforced area restrictions.
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Rice production in 2018/19 is down by more than a third from the prior year, the lowest since 1998/99. Tight supplies have curtailed domestic consumption.
These policies to restrict domestic rice production have a global impact. The medium-grain market is very thinly traded, and Egypt has largely abdicated its role as an exporter over the past few years. Moreover, Australia’s production is forecast to decline for a second consecutive year.
Egypt became a net importer in 2017/18 with the government indicating further willingness to import rice, even in its paddy form. Following the last severe reduction in area in 2010/11, the 2011/12 imports were around 300,000 tons and largely supplied by India as milled rice.
Ongoing efforts to address phytosanitary issues may provide an opportunity for U.S. rice to be supplied to the market. This potential to export to a former competitor is a significant reversal in the medium grain market.