| An interesting study was released this week outlining the optimal planting timeline in Arkansas. It showed that the highest yields are from fields planted between March 28th and May 20th. It also surveyed the weekly Crop Progress Report from 1981-2022, ultimately showing that there are typically 4.5 suitable fieldwork days per week. This is an important factor for producers to work into their planting models, as the weather has proven to be a consistent x-factor each and every year. This essentially means that if there are three full weeks left in the ideal range, there are actually only 13.5 productive planting days, instead of the assumed 21 days. That being said, Arkansas is showing 12% planted this week, Louisiana at 74%, Mississippi at 8%, Texas at 49%, and Missouri at 1%. California is still zero with the earliest field work just getting underway. The WASDE Report was released this week. The surprise was that the USDA lowered carryover by 6 million cwt, which made rice futures rise sharply. The WASDE also raised exports by 2 million cwt and lowered imports by 2 million cwt, and raised domestic usage by 2 million cwt. All other details remain relatively flat, but the big surprise was the drop in carryout. It is fortunate that the crop is expected to return to its normal size. The FAO Rice Price update for this month dropped 3.2% from last month but is 17.6% above this time last year. This number correlates quite closely to the 20% tariff that India put on most of their exports, thus bumping the price of all indica varieties from last year’s levels. The drop this month, however, was largely attributed to aromatic and japonica varieties because the available supply for japonica is tight awaiting new supplies. It is our expectation that prices will rise slightly in the coming FAO price index based on Indonesia’s entrance back into the market for indica rice to shore up emergency supplies. A recent USDA GAIN report on Ghana highlights a favorable outcome from bilateral creditors and the IMF towards Ghana to help the country weather its economic storm. Because of this help, rice imports expect to remain stable. While the country is producing approximately 800,000 MT of milled rice this year, which is 16% higher than last year, the country is still very reliant on rainfall and imports. The country still needs to import 700,000 MT to fill its total consumption, and that number is expected to grow. Government and NGO support encourages farmers to plant rice over other crops, and this results in over 800,000 acres of regular production. Rice is the second most important cereal in Ghana and is a major staple food with per capita consumption now estimated at 95 lbs. The 2023 estimate of the population in Ghana is 34 million, with a 2.12% growth rate. Urban consumers represent 55% of Ghana’s population and account for about 80% of the total imported rice consumption, preferring imports due to their perceived higher quality. In years past, U.S. rice has enjoyed a strong market in Ghana, but due to a drop in quality and increase in prices, Ghana has found new trading partners in Thailand, Vietnam, Pakistan, and India. We do view Ghana as a growth market for U.S. rice though and are optimistic about trade opportunities on the horizon. A GAIN report on Venezuela reports that the U.S. lost the paddy rice market because of its high prices, and a strong resurgence of rice acres in the country. Venezuela went from growing 240,000 MT rough rice in 2021 up to 424,970 MT of rough rice in 2022, an increase of 90%. Post forecasts a 7% decline in Venezuelan rice imports, down to 420,000 MT, and is based on the aforementioned growth of local production. Of the 450,000 MT that Venezuela imported this year, 49% was paddy, 47% was milled, and 4% was broken. 29% of this rice came from Brazil, 21% from the US, and 21% from Guyana. This country represents a more strong potential for U.S. rice and is an opportunity to develop more business. Weekly export sales were ugly again, showing net sales of 37,500 MT, a drop of 65% from last week and 11% from the four-week average. Exports were 33,500 MT, a drop of 41% from last week, but up 7% from the four-week average. Overall exports are down nearly 40% this year. It is imperative that the U.S. regain market share in Central and South America so the domestic market and Haiti aren’t left doing all the heavy lifting.  |
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