| The conundrum persists: How does the U.S. long-grain industry compete in the export market when prices are still so high? News of Haiti returning and higher-than-normal export sales are encouraging, but very few of those sales are actually to Mexico, and cheaper rice from our competitors is likely to find its way into Haiti. Perhaps the only cure to this problem will be a significant increase in acres, but with the water problems in Texas, it is unlikely to see a rebound significant enough to bring prices back into a balance that will result in competitive pricing. We shall see, but for the time being, the market has learned to function in its current form, and domestic business is strong enough to support prices. On the ground, the market has remained fairly quiet in most places, namely Mississippi. Barge movements are light with little export business on the books. The story on medium grain is consistent across most states — if seed is available, it’s going to be planted. The expectation is that Arkansas is going to see a resurgence in long grain, but the magnitude of this expected return to “normal” is yet to be decided. In a few more weeks and we will have a much better direction on where the planting will go. A GAIN report on Argentina this week highlights the persistent drought in South America. With approximately 10% of the harvest complete, it is expected that farmers have been forced to abandon approximately 50,000 acres of rice on account of the drought in Corrientes and Entre Rios. Rainfall in 2022 was only half of the annual average, so producers who planted hoping for rain and surface water were sorely disappointed. This will ultimately result in a shorter exportable supply, with key export markets like the EU, Brazil, and Chile competing for the product. These dry conditions are having a significant impact on early-planted corn in the region as well. In Asia, we are seeing some price softening in Thailand, likely a result of the second crop supply about to hit the market. Prices have adjusted from approximately $485pmt last week to $470pmt this week. Adjustments in Vietnam were less severe, though a slight reduction is noted from $465pmt last week to $460pmt this week. While China will remain the world’s largest importer in 2023, the Philippines will soundly hold the second spot. They have historically sourced the majority of their 3.7 MMT from Vietnam, but because of reduced acreage this year, exports from Thailand are expected to double this year, reaching as high as 20% of total imports to the Philippines. Net sales of 59,400 MT for 2022/2023 were down 47% from the previous week, but up 36% from the prior 4-week average. Increases were primarily for Mexico (51,200 MT), Guatemala (5,000 MT), El Salvador, Saudi Arabia (800 MT), and Canada (300 MT). Exports of 61,700 MT were up 82% from the previous week and 56% from the prior 4-week average. The destinations were primarily Mexico (25,100 MT), Honduras (19,200 MT), Guatemala (10,000 MT), Canada (2,800 MT), and El Salvador (2,600 MT). |
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