USRPA Plays Crucial Role in Ecuadorean Market Opening

The Ecuadorean Reverse Trade Servicing Trip Hosted by USRPA in September included a stop at USDA-FGIS in Stuttgart, AR.
Earlier this week, Ecuador’s AgroCalidad finalized their initial entry requirements for U.S. rough rice, a direct result of a reverse trade servicing trip hosted by USRPA last month. As we shared in a previous edition of the Rice Advocate, USRPA hosted a group of Ecuadorean rice millers and two AgroCalidad officials in mid-September with stops in Missouri, Arkansas, and Louisiana. Their knowledge of the market outside of Ecuador has been extremely limited until Spring 2023, when CORPCOM, Ecuador’s millers’ association, invited USRPA to a series of virtual meetings to discuss Western Hemisphere market conditions and the outlook for the 2023 U.S. harvest. Plans grew from there for a reverse trade servicing trip. While some industry members objected to the visit, USRPA moved forward knowing the opportunity could not be missed. The site visits culminated with a meeting between APHIS and AgroCalidad at the end of the week. With the Ecuadorean industry leaders quite pleased with the trip, USRPA staff was optimistic that this week’s announcement would come to fruition. “On behalf of CORPCOM, we want to thank the USRPA for putting together an excellent week of meetings that are so important for the whole Ecuadorean rice supply chain, especially the end consumer,” said Juan Pablo Zuniga, president of CORPCOM. “This will strengthen our relations with U.S. rice farmers, taking into consideration our current needs due to the situation caused by the El Niño phenomenon.” The resulting purchases will be the country’s first since the late 90’s. USRPA is proud to have been instrumental in bringing U.S. rough rice back into Ecuador and thanks our partners at USDA and APHIS for their support in the process.

Market Update: Low Mississippi River Level Complicates Rice Exports

There are a few significant items to unpack this week; some domestic and more international. To look first at the international scene, the items of interest are the Argentinian currency debacle and Indonesia’s ballooning imports. To look first at the Western Hemisphere and Argentina, where inflation has skyrocketed as high as 130% according to some reports. There is a major political battle taking place in the country right now, with some factions wanting to convert to the U.S. dollar and others wanting to fix their own problems with their own currency. To quote one article from Bloomberg, “Swapping currencies still won’t address Argentina’s root problem: a gargantuan-sized government growing even bigger within an economy constantly shrinking.” Problems like this obviously create trade concerns, and there is no consensus yet on how to resolve the issue. Direct impacts on the rice trade will come to light in spring 2024 when their new crop is harvested.The Indonesian government’s decision to boost imports has had a direct impact on Vietnam, Thailand, Myanmar, Cambodia, and Pakistan. Of the additional 1.8 MMT of rice imports, 700 TMT is needed this calendar year to distribute to the poor. Indonesia’s election is on February 14, 2024, so having stockpiles for distribution through that date is the priority right now. There is an implicit assumption that China may come into play in 2024, or a possible G2G deal with India (India now has G2G deals with UAE, several West African countries, Nepal, and others) to finish out Indonesia’s import demand, but there is no direct news on that yet.
Turning now to the home front, harvest is wrapping up in all states but California, but even there the late harvest is approaching 75% complete. With mills running full steam against solid domestic and international demand, the hiccup is shipping milled products from the northern parts of the Mississippi River. Low water levels are limiting how much-milled rice can be loaded on each barge, therefore impacting profit margins for the mills. This problem is affecting not only rice but all grains and pulses being shipped from northern Arkansas and above. Significant weather systems in the region aren’t pointing to any immediate relief from the dry conditions, and precipitation is the only thing that can solve this problem in the near term.
Prices in Asia show a continued relaxation in Thailand, with FOB prices getting as low as $575 pmt, down $5 pmt from last week. In Vietnam, however, strong demand is holding prices firm at $635 pmt. We typically see forces that drive convergence in these two markets, and the price difference right now is due largely to supplies and availability. Myanmar is just below $600 pmt, and now Pakistan is registering at $550 pmt.
The weekly USDA Export Sales reports show net sales of 65,100 MT this week, up noticeably from the previous week and up 51% from the prior 4-week average. Increases primarily for Haiti (22,700 MT), Japan (13,000 MT), El Salvador (6,000 MT), Honduras (6,000 MT), and Costa Rica (6,000 MT). Exports of 70,100 MT were up significantly from both the previous week and the 4-week average. The destinations were primarily to Mexico (28,300 MT), Nicaragua (27,600 MT), Haiti (8,000 MT), South Korea (2,200 MT), and Canada (1,800 MT).  

3rd Annual Ray Stoesser Memorial Scholarship: Application process is now open!

In partnership with the US Rice Producers Association, the Stoesser family is offering a $5,000 scholarship to one deserving high school senior or current college student who is interested in or is currently pursuing a career in an agriculture-related field. 
In addition to the monetary award, the selected recipient will serve as a student ambassador for USRPA in 2024 with an expectation of participating in at least two activities during the calendar year. The recipient will be invited to participate in various USRPA activities, including but not limited to Field Days, legislative activities, Texas Rice Council meetings, conferences, and more.
Specific criteria for selection:Applicants should have the intention of pursuing a career in an agriculture-related field. Applications will be accepted from high school seniors, college students, and/or college graduate students.In addition to completing the online application form, applicants should submit a self-produced video no longer than 5 minutes answering the following questions: What is your vision for the next generation of the U.S. rice industry? Please cover topics relevant to the future of the U.S. rice industry, such as food security/safety, sustainability, etc. 
Learn More

RMTC 2024 Headed to Cancun, Mexico

USRPA Mexico Promotional Campaign Increases Sales

El Alazan Wholesaler's In-Store Promotions
During a 50-day promotional activation campaign in Mexico City, we promoted U.S. rice in collaboration with the importer Alazan across 21 stores. This resulted in the sale of 1,475 kilograms of rice.
We have confirmed the sell-out data with “Tiendas DZ”, who provided us with a comparative analysis against their average sales per store. On average, our promotional campaign led to a 14% increase in their sales during the activation period. 
Walmart In-Store Promotions
76 days of in-store activities were conducted through an intensive promotional activation campaign in 12 Walmart stores in the north of the country (Monterrey), including 2 Walmart Supercenters and 10 Bodega Aurrera outlets.
Our primary focus was on promoting the Schettino and SOS rice brands, two major importers of U.S. rice. The implemented strategies were designed to enhance product visibility on shelves and increase their appeal to customers.

South Louisiana Rail Facility Continues Expansion


Incheon Bay arrives for SLRF to load 25k paddy rice for Mexico.
SLRF continues expansion, pouring the foundation for 7500 tons of storage. 

Washington, D.C. Update

SRPA Joins Other Ag Groups Regarding Fertilizer Duties

USRPA joined with 62 other agricultural groups sending a letter to Commerce Secretary Gina Raimondo urging her to recognize the current difficulties faced by farmers as she recalculates duties on phosphate fertilizer imported from Morocco.

In February 2021 Commerce called on the International Trade Commission (ITC) to implement duties of almost 20% on imported fertilizers from Morocco. The Mosaic Company, which manufactures fertilizers used in the U.S. and abroad, had filed a petition with the Commerce Department seeking the duties. The ITC found that Morocco and Russia had unfairly subsidized fertilizer production and voted in March of that year to impose the duties on Morocco in addition to similar duties on Russian imports.

This September, the U.S. Court of International Trade ordered the ITC to reconsider its previous decision on calculating the duties. 

Commerce is expected to finalize its administrative review by November 1 and issue its remand determination by December 13.

Read the letter here.

House Speaker Uncertainty

It’s been nearly two weeks since Rep. Kevin McCarthy (R-CA) was ousted as Speaker and the House of Representatives has yet to elect his replacement. The last few weeks the House Republican Conference has scrambled to find a nominee with enough support to garner 217 votes to secure the Speakership. Majority Leader Steve Scalise (R-LA) was the original nominee to be McCarthy’s replacement, but he withdrew his name from the Speaker’s race before a vote on the floor could even be called. Judiciary Chairman Jim Jordan (R-OH) followed as the second Conference nominee and failed to garner enough votes to become Speaker after two-floor votes. Jordan is now pausing, not withdrawing, his current campaign for Speaker. While there is some real and growing momentum at this point behind temporarily expanding Patrick McHenry’s power as Acting Speaker, that path forward has opposition and involves additional steps within the Conference or on the floor and is uncertain. Some of the other potential Speaker candidates being thrown into the conversation include Reps. Mike Johnson (R-LA), Kevin Hern (R-OK), Richard Hudson (R-NC), Tom Emmer (R-MN), Elise Stefanik (R-NY), Tom Cole (R-OK), Frank Lucas (R-OK). The Conference is fairly unlikely to revisit Rep. Kevin McCarthy (R-CA) at this point, but after the past two weeks, uncertainty remains there as well.

From a wider lens, House floor action remains frozen until a new Speaker can be elected, thus further creating backlog and uncertainty for the entire legislative process. Appropriations and Farm Bill reauthorization will be further delayed until this conundrum is solved.

Market Update: U.S. Long Grain Harvest Nears Completion

Milling yields aren’t improving as harvest is wrapping up across the South. Field yields have remained strong, but it’s taking more paddy to meet the milled specs than originally anticipated, with the head yield settling in the lower 50s. It’s still tough to say exactly where prices will settle out, but with strong export and domestic demand, it won’t take long to transfer from a harvest-driven focus to a market-driven one. Storage and drying facilities, merchants, and mills are tempering recently harvested rice in an effort to maintain quality and hopefully milling yields. Storage space in northeast Arkansas is tight and a significant amount of rice is being stored in temporary bags on the ground. Many believe there is more rice than previously reported. The Mississippi River is near an all time low level, causing barging problems.
Haiti is our largest long grain milled market and is having a significant dispute with its border nation, the Dominican Republic. The construction of a canal on the Haitian side of the Dajabon River has caused such turmoil, cross border trade between Haiti and the DR has been closed. Haiti depends on the DR for a significant amount of its food, and this dispute is putting extreme pressure on an already tenuous situation. While the DR does not provide rice to Haiti, it does provide other staples in which rice can be a substitute. More to develop on this situation, but we may see a further increase of shipments to Haiti beyond the 28 TMT increase year over year we already have on the books.
In Asia, the big news is the augmented demand from Indonesia. We referenced it last week, but the implications have made its way through the market. Indonesia is the fourth largest consumer of rice in the world, and their quadrupling of imports on account of the El Niño and climate risk is putting pressure on an already tight market. With India out of the export market, Vietnam and Thailand have picked up the slack thus far. However, there is still room for a either a G2G transaction with India, or it’s possible China may come to the aid of BULOG, Indonesia’s purchasing arm. It’s important to note that of global stocks are now pegged at 167 MMT, and China accounts for 103 MMT, or just over 60%. China would have no problem committing to the volume if it becomes entirely necessary.
These factors force the global market to run up against a severe timing issue. India is expected to keep their export ban in place until at least the end of Q1 2024. All the while, they are building stocks at a rate much quicker than normal, which could result in a glut of available rice sometime after March 2024. While making a marketing plan based on the current fickleness of India’s rice availability has proven dangerous, waiting for them to unwind the ban could also prove catastrophic. This leaves prices in Vietnam at $630 pmt, nearly $40 premium to Thai prices at $585 pmt. The table is set for firm pricing through the end of this calendar year and into the first part of next, but all bets are off after that.
Prices in the Western Hemisphere are holding steady on account of global events as well, with U.S. export quotes remaining at $760 pmt. Uruguayan quotes rose as high as $750 pmt on tightened supplies, making U.S. the preferred supplier until the full harvest commences in March in the Southern Hemisphere. The numbers speak for themselves early this marketing year, as Long Grain milled export sales are up 46% vs. 2022 on strong business Iraq, Mexico, and Haiti. Long Grain rough numbers have buoyed 160% this year compared to last, with huge sales to Mexico, and strong demand from Nicaragua, El Salvador, Venezuela, and Ecuador.  

USRPA Judges the 2023 Katy Rice Harvest Festival Rice Cooking Contest

The City of Katy Fussell Senior Center partnered with the Katy Rice Harvest Festival to host the 2nd Rice Cooking Competition on Wednesday, October 11. USRPA staff member Iris Figueroa participated as one of the judges of the event alongside Chef Casey Castro from Astor Farm to Table and private / celebrity chef, Chef Willie Holmes.

Twelve entries were judged with rice as the star of the show. Congratulations to all the participants and winners.

USRPA Participates in the Texas Rice Festival in Winnie

USRPA staff members Iris Figueroa and Grace Wang participated in the Rice Education Exhibit at the 54th Annual Harvest Celebration in the Winnie-Stowell Park, Winnie, Texas last weekend.
This year, in keeping with the purpose of the Rice Education, Texas Rice Council board members Ben and Debbie Hoffpauir from Hoffpauir Grain DBA HG Rice Mill joined USRPA to educate kids on the process of milling rice and gave out samples to the attendees. 2023 Ray Stoesser Memorial scholarship recipient, Gayla Rose, also joined and interacted with kids and families in all things RICE!
It was a great event to educate youth. Participation in community educational events has allowed USRPA to raise awareness of rice and promote rice consumption and education.

Debbie Hoffpauir, from Hoffpauir Graine ducating the kids about the rice milling process. Make sure to check out their online store here.

2023 Ray Stoesser Memorial Scholarship recipient, Gayla Rose, and USRPA staff member Iris Figueroa.