The biggest news this week is the surprise tender from Iraq for 30,000 metric tons for quick delivery. While it’s been known for some time now that Iraq needed supplies, this announcement shows how desperate the situation is. To make matters worse, trying to acquire rice in such short order amid one of the most difficult shipping environments in years severely complicates their situation. What this means is that Pakistan is likely (and rumored) to win the first tranche of business, while the Iraqi Grain Board negotiates on the sidelines with other potential suppliers, some of which are listed below in the results from the original tender. Note that the US prices were the second-highest only to Paraguay, where Pakistan, along with its proximity, is the front-runner with the second-lowest price only to Thailand. More to come on this development, as the US rice industry desperately needs milled business. The U.S. – Iraq Memorandum of Understanding continues to be ineffective but we shall see if the political efforts bring much-needed results in the near future.
In Asia, the big news is Indonesia’s return to the import market, as BULOG is expecting to source up to 1 MMT in the coming year. This is “old hat” for those that remember when BULOG was consistently a large importer in years past, but in recent memory, they have enjoyed relative supply stability from their own domestic production. This will change this year and may have an impact on the pricing landscape of the Thai/Viet prices. Prices in Asia on the whole trended down this week, with Thai prices down to $487 PMT, Viet prices down to $495 PMT, Pakistan down to $428, and Myanmar holding constant at $440. This is expected in Myanmar though, as the coup has stalled any business or exchange for the time being. Much of the lag in Asian pricing can be attributed to a stronger dollar.
On the ground, rice planting is decidedly behind last year, and behind the 5-year average as well. Louisiana and Texas are leading the pack with 61% and 59% planted respectively, but this is compared to last year where they were 67% and 71% planted. Other states are barely worth a mention, but drier weather is expected in the coming weeks, and the expectation is for plantings to speed up. Texas is showing 32% emerged, and prices are relatively unchanged at $13.83/cwt. Louisiana is also holding steady, and the USDA is reporting 35% emergence, 7% behind last year. Mississippi, Arkansas, and Missouri are all reporting prices around $13/cwt, and nothing in the realm of emergence to be reported this week.
Today’s USDA WASDE report is considered bearish for U.S. rice while indicating a 2020 carryover of 30.8 million hundredweights compared to 27.3 in the previous report. Export sales are down significantly, showing a 21% decline from last week, and 30% off of the four-week average. Vessel loadings weren’t any brighter, reporting in at a 51% drop-off from last week. Whereas the sales portion of this report is on account of high prices and low demand, the slow loadings are exacerbated by the logistics debacle that has marred 2021 thus far.
The Futures market was largely unchanged as prices basically matched last week’s figures. Average daily volume jumped 37% which would be more significant if the volume was higher, but as it stands, these metrics don’t provide much in the way of market projections.