| With harvest well over halfway done in all states except California, we are getting a better handle on field and milling yields. Arkansas, now over 75% complete, is reporting head yields coming in closer to 52-54, and totals not often breaking 70. Overall not terrible news, but still leaves room for optimism. It is similar in Mississippi and other states, with reports being closer to 55/68. Field yields in Louisiana aren’t ideal, nor is the storm damage, but there is hope that the second crop will be better than the first. We don’t say this to only report bad news, as overall the harvest is good and prices are competitive with other exporters. The WASDE report released last week had a few items worth further mention in light of the current harvest. First is that since the August report, U.S. prices have decreased by $33 pmt, down to $739 pmt in expectation of plentiful supplies from the ensuing harvest. In line with the price drop for U.S. long grain, Uruguayan quotes fell only slightly to $796 pmt, which is still the highest among major exporters in the West. The market dynamic in Mexico is also in flux as a result of COVID-19 and anti-inflationary policies from years ago. This isn’t a surprise and something we have chronicled in the Rice Advocate since the initial anti-inflation policy was implemented in May of 2022. The effect, as feared, is that Mexico now has a more diversified supply of rice importers, and it is also changing the mix of paddy vs milled imports. The suspension of import tariffs that was broadened to include milled rice in January of 2023 has resulted in nearly 1/3 of imports to Mexico now being milled rice. Suppliers for all types of rice to Mexico now include Brazil, Uruguay, Paraguay, and even Thailand more recently. Having a quality product, competitive prices, and strong relationships will be key in sustaining this relationship long term. India is making a lot of headlines this week, as more news is leaking out of the country regarding its export ban. Some can’t believe it’s taken India this long, as a recent USDA Grain report forecasts the 2024/25 Indian rice production to be another near record of 139.0 million metric tons! It appears buyers are postponing orders from Vietnam or Thailand in hopes of India easing their non-basmati export ban. It is unclear if this is because there is actual policy coming out of India to green-light exports, or if it is just being assumed because there simply won’t be room to store another crop domestically that is set to arrive in October. U.S. long grain hasn’t historically competed directly with Indian rice. Consistent G2G deals over the last year have muted the coming blow, and if India does open the floodgates, there is concern over what that will do to the global price of rice. On the ground, prices in Texas are $15.50-$16.50. Louisiana is reporting $14.80-$15.20. In Mississippi, Arkansas, and Missouri, we are reporting a $14.50 bid and a $15.55 ask. The weekly USDA Export Sales report shows net sales of 81,100 MT this week, up 31% from the previous week and up noticeably from the prior 4-week average. Much of this was medium and short grain. Exports of 89,100 MT were up 46% from the previous week and up noticeably from the prior 4-week average, also heavy on the medium and short grain. |
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