The largest revision this month to the 2019/20 U.S. rice balance sheet was a 2.4-million cwt increase in the import forecast to a record 32.5 million cwt, up 12 percent from 2018/19. On the use side, the total export forecast was raised 1.0 million cwt to 99.0 million cwt, with long-grain rough-rice accounting for all of the upward revision.
On balance, these supply and use revisions raised the ending stocks forecast 1.4 million cwt to 30.0 million cwt. Season-average farm-price forecasts for 2019/20 were lowered for both classes of rice and in both regions. In the global rice market, the 2019/20 production forecast was lowered 0.5 million tons, while the ending stocks forecast was raised more than 1.0 million tons.
The 2020 global export forecast was lowered almost 0.7 million tons to 45.3 million tons. Quotes for both Thailand and U.S. long-grain milled rice trading prices are higher than a month earlier.
U.S. 2019/20 Imports Projected Up 12 Percent from 2018/19
The only 2019/20 U.S. all-rice supply side revision this month was an 8-percent boost in the import forecast to 32.5 million cwt, up 3.5 million cwt from a year earlier and the highest on record. This month’s substantial upward revision is based on a stronger-than-expected pace of imports through December and expectations regarding purchases the remainder of the 2019/20 market year.
At 124,229 tons (product-weight), December 2019 U.S. rice imports were the highest on record and up 35 percent from the November 2019 imports and well above the previous monthly record high of 118,471 tons imported in December 2018. Through December 2019, the United States imported 448,981 tons of rice in 2019/20, up nearly 16 percent from a year earlier, with imports higher than a year earlier each month.
By class, long-grain imports are projected at a record 26.0 million cwt, up 6 percent from the previous forecast and 11 percent higher than a year earlier. Through December 2019, the United States imported 355,004 tons of long-grain rice, up 18 percent from a year earlier. Thailand supplied 60 percent U.S. 2019/20 long-grain rice imports through December, up 27 percent from a year earlier.
Most of the long-grain rice imported from Thailand is jasmine rice, a premium aromatic. Thailand also ships a much smaller amount of broken kernel rice to the United States that is included in the long-grain import category for use in various processed products. Imports from India, the second- largest supplier of long-grain imports to the United States, were reported at almost 70,000 tons through December, up more than 6 percent from a year earlier.
Most of the long-grain rice imported by the United States from India is basmati rice, also a premium aromatic. Pakistan supplies a smaller amount of basmati rice to the United States. At 35,493 tons, U.S. August-December 2019 long-grain imports from Brazil were up almost 4 percent from a year earlier, with about 22,000 tons imported in December. Much of the rice imported by the United States from Brazil is broken kernels for processed uses.
U.S. 2019/20 medium- and short-grain imports are projected at a record 6.5 million cwt, up 16 percent from the previous forecast and 17 percent higher than a year earlier. Through December 2019, the United States imported almost 94,000 tons of medium- and short-grain rice, up almost 8 percent from a year earlier.
China is currently the largest supplier of medium- and short-grain rice to the United States, with almost all of this rice shipped to Puerto Rico. Through December 2019, China had shipped 41,524 tons of medium- and short-grain rice to the United States, mostly to Puerto Rico, about the same level as a year earlier.
Since May 2018, China has returned as the major supplier of rice to Puerto Rico after a decade of near-absence when the U.S. supplied most of this market. In 2018/19, China supplied almost 65,000 tons of rice to the United States, with Puerto Rico taking 63,000 tons in three 21,000-ton shipments.
Nearly all of China’s rice exports to the U.S. are from its Government-accumulated stocks of older rice that are sold at well below current trading prices. In addition, freight costs are much lower for rice shipped from China due to provisions of the 1920 Jones Shipping Act that requires all shipments between any two U.S. ports to be on a U.S.-flagged vessel.
China was a major supplier of rice to Puerto Rico from 2005/06-2007/08 prior to the U.S. regaining this market.
Through December 2019, Thailand had shipped 31,390 tons of medium- and short-grain rice to the United States in 2019/20, up more than 28 percent up from a year earlier. Most of this rice was a specialty rice that is classified as medium- and short-grain rice.
In 2018/19, Thailand shipped 66,000 tons of medium- and short-grain rice to the United States, making it the largest supplier, but just 1,000 tons more than a close number-two-China. India’s August-December 2019 shipments of medium- and short-grain to the U.S. of 14,550 tons were up 16 percent from a year earlier.
Italy is the only other significant supplier of medium- and short-grain rice to the United States, typically shipping around 10,000 tons annually, nearly all it premium Arborio rice.
U.S. Rice Supplies Projected To Contract 7 Percent in 2019/20
Total U.S. supplies of rice in 2019/20 are forecast at 262.0 million cwt, up 1 percent from the previous forecast but 7 percent below a year earlier. The slight upward revision this month is due to the much larger import forecast. The year-to-year decline in total rice supplies is due to a much smaller crop.
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Long-grain 2019/20 total supplies are forecast at 184.2 million cwt, up 1.5 million cwt from the previous forecast but 11 percent below a year earlier—a result of a substantially smaller crop. Medium- and short-grain supplies are forecast at 75.7 million cwt, up 0.9 million cwt from the previous forecast and up 4 percent from 2018/19—mostly due to a larger carryin.
Beginning stocks for 2019/20 remain estimated at 44.9 million cwt, 53 percent larger than a year earlier. Long-grain beginning stocks remain estimated at 32.6 million cwt, more than 60 percent higher than a year earlier. Combined medium- and short-grain beginning stocks remain estimated at 10.2 million cwt, up 34 percent from a year earlier. Stocks of brokens—not reported by length of grain—remain estimated at 2.1 million cwt, up 46 percent from a year earlier.
U.S. 2019/20 production remains estimated at 184.7 million cwt, 17.5 percent smaller than the 2018/19 crop. Most of the production decline was the result of a 15-percent reduction in harvested area, largely caused by excessive rainfall nearly all spring across most of the South that led to historically high preventive plantings in the region. The average yield of 7,471 pounds per acre was down almost 3 percent from a year earlier, largely a result of the excessive rainfall in the South that delayed plantings and then hampered operations during much of the summer.
California’s plantings were delayed by rain as well, a factor behind weaker yields in the State, although most of the California rice crop was planted despite the delay. By class, the 2019/20 U.S. long-grain crop remains estimated at 125.6 million cwt, 23 percent smaller than a year earlier and the smallest since 2011/12.
The 2019/20 combined U.S. medium- and short-grain crop remains estimated at 59.1 million cwt, down 2 percent from a year earlier.
U.S. 2019/20 Long-Grain Export Forecast Raised 1.0 Million Cwt to 71.0 Million Cwt
The U.S. all-rice export forecast was raised 1.0 million cwt to 99.0 million cwt, up almost 6 percent from a year earlier. This month’s upward revision in exports is based on a high level of outstanding sales on the books as of late January, especially to Haiti, Mexico, and Central America, a strong pace of total shipments reported by the U.S. Census Bureau through December, and expectations regarding shipments and sales the remainder of the 2019/20 market year.
The pace of U.S. shipments through December indicates even higher U.S. exports than currently forecast. However, a tightening of U.S. supplies later in the 2019/20 market year and projections for rising U.S. prices are expected to eventually slow the pace of U.S. exports in 2019/20.
Long-grain U.S. exports in 2019/20 are forecast at 71.0 million cwt, up 1.0 million cwt from the previous forecast and 8 percent larger than a year earlier. This is the second consecutive month of a 1.0-million cwt upward revision in the U.S. long-grain export forecast. Through December 2019, U.S. exports of long-grain rice totaled 31.0 million cwt (rough-basis), up 9 percent from a year earlier, with U.S. shipments well ahead of a year earlier to Guatemala, Mexico, Nicaragua, and Venezuela.
Mexico is the largest market for U.S. long-grain rough-rice exports, accounting for almost half of U.S. shipments. Haiti is the largest market for U.S. long-grain milled rice exports. Nicaragua has recently returned as a major buyer of U.S. long-grain rough rice after almost a decade of weak or negligible purchases of U.S. rice. Although U.S. August-December 2019 shipments to Venezuela were up 149 percent from a year earlier, the level of these shipments was well below levels reported for the same period from 2014-2017.
Latin America is projected to remain the top market for U.S. long-grain rice in 2019/20, with the majority of the U.S. sales rough rice. The Middle East and Canada are projected to account for most of the remaining U.S. long-grain exports, purchasing almost exclusively milled rice, including a small amount of brown rice sold to Canada.
U.S. medium- and short-grain exports in 2019/20 remain projected at 28.0 million cwt, up just 0.2 million cwt from 2018/19.The extremely small year-to-year projected increase in U.S. medium- and short-grain exports is based on expectation of another consecutive year of few sales outside the three Northeast Asia buyers—Japan, South Korea, and Taiwan—and Jordan, Mexico, and Canada.
All imports of rice by the three Northeast Asian countries are made as part of their World Trade Organization agreements. These three Northeast Asian countries account for the bulk of U.S. medium- and short-grain rice exports, with California supplying almost all of this rice. The U.S. has sold almost no rice to North Africa in 2019/20 and through January 30 had shipped only a small amount of rice to Turkey—previously a major market for U.S. medium- and short-grain rice, mostly rough rice.
The South typically accounts for the bulk of U.S. sales to North Africa and typically supplies some of the shipments to Turkey. California supplies most of the U.S. rice to Jordan, which takes only milled rice.
U.S. 2019/20 rough rice exports are forecast at 37.0 million cwt, up 1.0 million cwt from the previous forecast and 12 percent larger than a year earlier. This month’s upward revision in rough-rice exports was largely based on stronger-than-expected shipments and outstanding sales to Mexico and Central America. Long-grain shipments to Latin America account for the bulk of U.S. rough rice exports, with Mexico and Central America the top markets.
Through January 30, Mexico was the only market for medium- and short-grain rough rice exports in 2019/20, with total commitments of U.S. medium- and short-grain rough rice to Mexico totaling 35,300 tons, well below the 1.1-million tons of total commitments of long-grain rough-rice reported by the weekly U.S. Export Sales report. Mexico is typically a small buyer of medium- and short-grain rough rice, with long-grain its dominant purchase.
Although the United States sold 41,500 tons of medium- and short-grain rough rice to Libya in 2018/19, to date there been only minuscule U.S. sales of rice to Libya in the 2019/20 market year.
U.S. 2019/20 milled-rice exports (combined milled and brown rice exports on a rough basis) remain projected at 62.0 million cwt, more than 2 percent above 2018/19. Haiti and Japan—the two largest export markets for U.S. milled-rice—account for most of the expected increase in 2019/20 milled-rice exports, with Japan’s increase largely due to a slightly larger than normal carryover of sales from 2018/19.
U.S. exports to Saudi Arabia through December were about 25 percent ahead of a year earlier. U.S. sales to Sub-Saharan Africa are projected to remain quite small as the U.S. is not price-competitive in this huge and fast-growing global rice market.
Total domestic and residual use of rice for 2019/20 remains forecast at 133.0 million cwt, 7.5 percent below the year-earlier record and the smallest since 2015/16. Long-grain domestic and residual use is projected at 99.0 million cwt, down 9 percent from a year earlier.
The projected decline in long-grain domestic and residual use from the previous year is primarily based on a much smaller crop that would indicate a smaller residual component that accounts for post-harvests losses. Medium- and short-grain domestic and residual use in 2019/20 remains forecast at 34.0 million cwt, more than 2 percent below a year earlier.
U.S. Long-Grain Ending Stocks Projected Lowest Since 2003/04
These U.S. supply and use revisions resulted in a 1.4-million cwt increase in the 2019/20 ending stocks forecast to 30.0 million cwt, 33 percent below a year earlier. The 2019/20 U.S. ending stocks-to-use ratio is forecast at 12.9 percent, the lowest since 2007/08. Long-grain 2019/20 ending stocks are projected at 14.2 million cwt, up 0.5 million cwt from the previous forecast but 56 percent below a year earlier.
These are the lowest ending long-grain stocks since 2003/04. The long-grain 2019/20 ending stocks-to-use ratio is forecast at 8.4 percent, well below 18.7 percent in 2018/19. For medium- and short-grain rice, 2019/20 ending stocks are projected at 13.7 million cwt, up 0.9 million cwt from the previous forecast and 35 percent larger than a year earlier. The medium- and short-grain ending stocks-to-use ratio is projected at 22.2 percent, up from 16.3 percent in 2018/19 but still below the abnormally large levels reported for 2014/15 and 2015/16.
This month, NASS reported revised monthly cash prices and marketings for market year (August-July) 2018/19 and for August-November 2019 in its January Prices report. These revisions resulted in revised 2018/19 season-average farm-price (SAFP) estimates for California medium- and short-grain rice, U.S. medium- and short-grain rice, and for U.S. all rice.
First, the California medium- and short-grain SAFP was raised $1.10 per cwt to $21.10, up $1.00 from 2017/18. The California medium- and short-grain SAFP is often revised up due to the pooling method of payment utilized by California cooperatives whereby producers receive a partial payment at the time of sale and the full payment after all the milled rice from that crop is sold.
For this reason, the California medium- and short-grain SAFP revisions are typically larger than revisions for Southern medium- and short-grain or for Southern long-grain.
Second, the U.S. 2018/19 medium- and short-grain SAFP was raised 90 cents to $18.50 per cwt, an increase of $1.50 from 2017/18. Third, the 2018/19 all-rice SAFP was raised 30 cents per cwt to $12.60, down 30 cents from 2017/18.
There were several revisions to the 2019/20 U.S. SAFP forecasts this month, primarily based on reported monthly cash prices through December 2019 and expectations regarding prices the remainder of the market year.
First, the 2019/20 U.S. long-grain SAFP forecast was lowered 20 cents per cwt to $12.00, still $1.20 above 2018/19. The higher expected long-grain SAFP in 2019/20 is largely based on much tighter U.S. supplies.
Second, the southern 2019/20 medium- and short-grain SAFP was lowered 10 cents to $12.10 per cwt, 20 cents below a year earlier. U.S. exports and sales of southern medium- and short-grain have been very weak thus far in the market year.
Third, the California medium- and short-grain 2019/20 SAFP was lowered 30 cents per cwt to $18.00, a decline of $3.10 from the revised 2018/19 SAFP.
Fourth, the 2019/20 U.S. medium- and short-grain SAFP was lowered 20 cents per cwt to $16.10, down $2.40 from the revised 2018/19 SAFP. Finally, the all-rice 2019/20 SAFP was lowered 20 cents to $13.00 per cwt, a decline of 40 cents from a year earlier.