| 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). |
 |
25722 Kingsland Blvd., Ste. 203, Katy, Texas 77494
Phone: 713-974-7423
USRPA does not discriminate in its programs on the basis of race, color, national origin, gender identity, sexual orientation, religion, age, disability, political beliefs, or marital/family status. Persons with disabilities who require alternative means for communication of information (such as Braille, large print, American sign language, language translation, etc.) should contact USRPA at 713-974-7423. EEO.
