Harvest continues in Arkansas at about 75% complete, where yields remain strong and head rice appears weak.  Cash prices are also consistent, now sitting about $13.85/cwt delivered, but more milled business will have to materialize for it to remain.  Mississippi is about 50% complete, with bids now at about $13.50/cwt delivered to a loading facility. With Iraq finding refuge in Thai purchases, it appears they are done buying for the balance of the year.  Haiti is becoming increasingly disorganized, and the NGO surge to fill the void of government purchases appears to be over.  Paddy sales are firm, but being able to deliver on shipment schedules is increasingly difficult with the aftermath of hurricanes on top of the now “standard” problems.

The woes in the freight market are no longer isolated only to those directly involved in trade and/or logistics—global retail customers are about to have a rude awakening based on reports this week heading into the holiday season.  The International Chamber of Shipping (ICS) issued an open letter to the United Nations General Assembly warning of a “global transport system collapse” if governments don’t restore freedom of movement to transport workers and give them priority to received vaccines recognized by the WHO.  This news comes at the same time as the maiden voyage of the largest ever container ship, “Ever Ace.” However, those familiar with the global supply chain constraints note that adding capacity to an already congested trade line does nothing to solve the fundamental problems of container port capacity and storage space—adding more material into a clogged system won’t alleviate the problem. Shipping problems will continue to be a part of the system well into 2022.

In Asia, the market remains largely unchanged.  Thai prices sit at $390 per metric ton, Viet prices continue to be elevated at $430 per metric ton, and India now sits well below at $355 per metric ton.  Pakistan sits just above India at $365 per metric ton but is having trouble gaining market traction on account of logistics.

A recent GAIN report on Pakistan reveals a decrease in the rice production forecast due to lower-than-average monsoon rains.  Expectations have been reduced by almost 4%, from 8.2 million tons down to 7.9 million tons.  The production reduction is only half of the story though; exports will also be reduced because of high shipping costs, thin container availability, and stiff competition from India.  Nine months into the marketing year, Pakistan has exported 2.99 million tons of rice, 8% below last year’s pace which was at 3.5 million tons.

In South America, this historic drought of the Rio Parana in Paraguay is cause for significant concern.  As the continent’s second-largest waterway behind only the Amazon, the importance of this trade artery to the rice sector cannot be understated.  The low water levels are preventing barge movements, creating further bottlenecks for rice, soybeans, and other commodities in the region.  The dry cycle of La Niña is looming, providing no respite in the near future.

The weekly USDA Export Sales report registered 75,100 metric tons of sales this week, up significantly from last week and the prior four-week average.  Increases were largely timing-based for medium grain tenders to Japan (39,300 MT) and Taiwan (12,000 MT).  Guatemala shows 6,000 MT, El Salvador 5,400 MT, and Canada 3,900 MT.  Exports of 54,800 were also up from the previous week, and up 29% from the four-week average.  Iraq recorded 43,100 MT, while Canada, Mexico, Jordan, and Saudi Arabia each registered just under 3,000 MT.

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