Market Update: Colombia Consumes 95 Pounds Per Capita
Similar to last week, planting is underway in Louisiana, while most other states
eagerly await better weather and ideal timing. Arkansas is just around the corner
from getting in the field, but cold and wet weather is pushing start dates out a
bit. This is exactly the case for California as well, where despite expectations for
100% water allocations, now many are worried they won’t be able to plant because
of too much water. The storms keep coming and the forecast isn’t letting up. Not
having decent drying weather for the fields will push out fieldwork, which will likely
cause some prevented planting to occur. This is welcome news for the folks who
were able to contract medium grain rice in the south several weeks ago, as the
actual California acreage keeps whipsawing back and forth.
A recent USDA GAIN report on Colombia, which is a key trade partner for the
U.S. because the U.S.-Colombia Trade Promotion Agreement was published this
week. Colombia has an average per capita consumption rate of approximately 95
pounds, which is higher than several other South and Central American countries.
Given that all other trade agreements have or are expiring and resulting in a dropoff of exports, Colombia provides a steady stream of business and is extremely
important to the market matrix, as the TRQ for U.S. rice for 2023 is 128,205 metric
tons. Over the last six marketing years, this means that the U.S. has been
responsible for about 35% of Colombia’s imports each year. Compare that to
Mexico, where only a few years ago the U.S. enjoyed nearly 100% market share
and now struggles to maintain levels that exceed 50% market share.
Domestic production in Colombia is expected to increase, due in part to the
implementation of better agronomic practices through a technology transfer
program called AMTEC. This program provides information to increase productivity
and reduce production costs. Domestic rice prices have also been on the rise in
Colombia, incentivizing more production. In January 2022, paddy was priced at
$327 pmt. One year later in Jan 2023, paddy increased 28% up to $418
pmt. Production is expected to increase just under 4% this year, up to 1.36 million
acres.
Moving to Asia, prices rebounded a bit in Thailand, bouncing back to $460 pmt
where it was two weeks ago after dropping to $450pmt last week. Vietnam,
likewise, is at $460 pmt after a jump this week. Pakistan rice is quoted just below
$450 pmt, achieving relative parity for the first time in several months. This firming
can be attributed to steady business and currency fluctuations, namely the
strengthening of the Thai Baht.
And not to beat a dead horse, but the weekly USDA Export Sales report was ugly
once again. There was a spike two weeks ago, but we are back down to net sales of
only 14,900 MT, down 42% from the previous week and 73% from the prior four-week average. Exports of 14,300 MT were up 37% from the previous week, but
down 76% from the prior four-week average.