| The market remains steady with exports into Haiti and resilient domestic business. There is a “hurry up and wait” stance as the crop grows, as there doesn’t appear to be much reason for price movements until then. In that vein, price discovery for new crops has been very limited in Texas, Louisiana, and the mid-south, with little old-crop paddy supplies to trade as well. Of note, rice in Louisiana is now approaching 30% headed, with Texas approaching 20%. The balance of the states continues to proceed nicely. The slow export situation is now old and/or common news, but an update on the Bud Light situation is at hand because of its impact on the domestic market. The negative response to the brand has been nothing short of astounding from a business and marketing perspective; it is something that will be studied for years to come by aspiring business majors, consultants, and MBAs. This is important to rice farmers because Anheuser-Busch is the single largest domestic buyer of rice, and if they stop selling beer, they stop buying rice. In the last week, it was reported that Bud Light’s sales have dropped a staggering 25%, and Budweiser sales have dropped 9%. This is a significant enough drop to remove Bud Light as America’s top beer brand, and it has been replaced by Modelo Especial. While we’re not here to talk about beer, the dilemma remains for rice farmers — boycotting for moral reasons has an impact on the producer. As mentioned above, the resilient domestic market has been the counterweight to the slow exports this year, with one of its core pillars being Anheuser-Busch. With a full crop coming, we need that pillar to remain strong. Full crop meaning, harvested, dried, and stored! In Asia, prices are still inching upward with Thailand and Vietnam both at $505 pmt, up from $500 last week. For Thailand, it’s important to note that Iraq is approaching 1 million metric tons of exports from this origin at a significant discount to its purchases from the US. The key takeaway here is a big “thank-you” to Iraq for holding to its MOU to buy U.S. long-grain rice. In Vietnam, steady demand and prepping for El Niño have kept exports and prices high. If India maintains its export ban and Thai and Viet prices continue to rise, there’s a possibility that the U.S. could attract more rice from Iraq and even some African countries next year as prices converge. There will have to be significant price movements on both sides of the globe for this to happen — but stranger things have happened. Looking at exports, it is interesting to note that Colombia currently holds the top spot for exports from the United States, registering just over 96 TMT. This reinforces the value of the Colombian TRQ to the U.S. rice market complex. The “usual suspect” for the top exporter is Mexico, which is now in second place through the first quarter at 93 TMT. The third top export market is Haiti at almost 85 TMT. Overall, 1st quarter exports have decreased 12% this year; a total of 785 TMT registered for Q1 2022, and a total of 690 TMT for Q1 2023. Weather interruption has caused production shortages in several markets in the Western Hemisphere, particularly Ecuador and Peru. Ecuador, normally a self-sufficient market, is looking to import a few thousand tons from its neighbor Colombia, but estimates indicate a shortage of 60,000 to 100,000 tons paddy basis. Frequent meetings between the Ministry of Agriculture, mills, and producers are ongoing. Peru has been buying some containers of milled rice from Uruguay of specific varieties. Also, Panama is expected to tender in a few days for 68,000 tons of paddy for delivery by August 31. While Brazil does not have a phytosanitary agreement with Panama for paddy rice and the U.S. harvest isn’t far enough along, this leaves Uruguay as the origin. Both Argentina and Paraguay are not in a position to offer either. This news and current market comments are causing prices to edge up in Mercosur. |
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