Market Update - USDA ERS Rice Report Lowers Exports Four Million Cwts

November 18, 2022
Reports on the market this week are much like last week. The business remains steady at the domestic level, and many are wondering how long it can keep up. Now that harvest is complete, paddy in first-hand is plentiful. There is a market for cash rice, but with slow exports and Haiti off the table, those offers will last only as long as the domestic market stays strong.
The USDA ERS Rice Outlook was published this week, with the “highlight” being that the export forecast was lowered by 4 million cwt. This comes as no surprise to anyone in the industry, but it still feels like a bit of a blow to see it so bleakly scrolled across the page. On the supply side, production was lowered 1.1 million cwt to 164.3 million and imports were raised 1 million cwt to a record 45 million. On the use side, exports were lowered 4 million cwt to 71 million, while the domestic and residual use forecast was raised 1 million cwt to 142 million. These revisions netted out to an increase of 2.9 million cwt in the ending stocks forecast, up to 36.1 million cwt.
Turning now to the ERS report on the global outlook, production was lowered 1.35 million tons to 503.7 million tons, 2% down from last year. This was a result of Nigeria, Pakistan, and Sri Lanka having a lighter production than a year before. The global consumption and residual use forecast are down 2.1 million tons from last year's record. Global ending stocks were lowered 2.2 million tons to 169.0 million.
In Asia, prices bumped a little this week, but are still within the band prices have been trading for the past several weeks; $415-$425pmt. Viet Prices softened just a bit down to $430pmt, while India graduated from $385pmt up to $390pmt. This is the first time Indian prices have exceeded the $385pmt price threshold, and our best guess would be currency fluctuations and the strength of the dollar. That is largely what is responsible for the appreciating price in Thailand in recent weeks.
Prices out of the United States remain far higher than the competition, but the domestic business is pulling more than its weight, and keeping cash offers afloat. We expect this to be the case through the holiday season and will turn a new chapter in the rice market upon entering the new year.
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