Global Markets: Rice – Weak Haitian Demand Dampens U.S. Export Prospects

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    Rice is a significant part of the Haitian diet, but Haiti is dependent on imported rice to supplement higher-priced domestic rice. In 2020, imported rice accounted for 85 percent of consumption in Haiti. However, imports are down so far this year and are expected to be the lowest in several years.

    This past year, Haiti has had significant political, security, and economic challenges, which in turn have affected rice trade. Exports to the country remain weak as exporters and the companies that provide insurance for shipments to Haiti weigh the risks of shipping there.

    Importers are only bringing in the bare minimum of what is needed, causing Haiti rice stocks to tighten and prices to surge.

    The situation in Haiti has also had a significant impact on U.S. rice exports to Haiti, (Jan-Oct 2021) which are down 12 percent compared with the prior year. November U.S. exports were sluggish and outstanding sales are low compared with recent years according to U.S. Export Sales. Haiti is mostly supplied by U.S. rice and is the largest U.S. milled rice market.

    However, U.S. exports face increased competition from other suppliers such as Brazil, Uruguay, and Taiwan, particularly in 2020. In 2021, U.S. suppliers have regained more market share, but competitors continue to supply the market.

    Because Haiti is so significant as a trading partner, the lower total imports by Haiti and loss of market share there are two reasons that the U.S. milled rice exports to the world are forecast at the lowest level since 1973/74.

    Looking ahead, Haiti rice imports are expected to rebound only slightly in 2022 which implies continued challenges for U.S. rice export recovery.

    Unseasonably High Rice Imports for the Philippines Push Up 2021 Forecast

    Since the Philippines shifted from a system of import quantitative restrictions to its rice tariffication law in February 2019, the government has had to balance the dual interests of both Philippine farmers and consumers and has used various policy tools to achieve this.

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    While imports have increased since the implementation of the tariffication law, the government ensures that the tariffs are in part supporting efforts to enhance domestic production. Rice is a politically sensitive crop and a staple food in the Philippines, so the government is attentive in balancing its need for imports and boosting its domestic production, which makes up about 85 percent of its total rice consumption.

    Philippine imports in 2021 are expected to rise to 2.6 million tons as the country remains the third-largest importer following China and Bangladesh. This year, a variety of factors explain why imports remain strong, especially in September and October. Pent-up demand and the overdue fulfillment of late shipments from top supplier Vietnam may partly explain higher imports in September and October.

    Furthermore, the opening of the economy from previous COVID-19 restrictions boosts consumer demand. Also, tighter supplies from a smaller third-quarter crop (July-September) increases the need to supplement total supply with additional imports. The Philippines has multiple rice crops throughout the year and the government often uses import licenses as a way to manage imports in the run-up to its harvests.

    This is especially common before its main harvest beginning in mid-September, thus imports historically dip down then. This year, the Philippines government has been more liberal with its issuance of import licenses and issued more than twice the number of licenses and quantity contained within the licenses for import in July and August compared to the same period last year.

    It continued to issue import licenses through October. The Philippines is expected to continue to import rice in November and December, albeit at a much more muted pace. The Philippine government stated it anticipates a fourth-quarter bumper crop (October-December) and buyers have indicated the government is not approving additional licenses.

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