Volume 18, Issue 34
September 2, 2021
In This Issue:
  • Hurricane Ida Damages NOLA Vessel Loading Facilities
  • Live Cooking Classes in Mexico Continue with Success
  • Congratulations to FECARROZ's New Executive Director
Hurricane Ida Damages NOLA Vessel Loading Facilities
Arkansas Harvest Avoids Storm Damage
On the ground, the only thing more pressing than harvest is Hurricane Ida and the aftermath. The destruction in urban populations is catastrophic, while damage to rural regions, and specifically the rice complex, is still being ascertained. We do know that some rice in Louisiana has been damaged and/or destroyed, but full effects remain unknown. Port congestion will no doubt be a concern moving forward as well. This week in the Port of Lake Charles, the SLRF is loading a vessel of rough rice (27,500 tons) with a milling yield of 61/72 for Venezuela. Options outside of the Port of New Orleans have grain exporters shifting attention to Lake Charles and Houston. The South Louisiana Rail Facility is actively shipping rough rice by rail into Mexico this week. Texas is on the downhill side of their harvest, with less than 25% remaining to get in the barn. The earliest of the early are cutting in Arkansas, and we look forward to having initial indications next week. 

On the ground, paddy prices remain strong with cash offers even as new crop supplies are hitting the market. Louisiana is offering $13.50/cwt, Texas has bids around $14.30 +/- per cwt based on shipment dates. Arkansas, Mississippi, and Missouri bids remain unchanged at $14.50-$15, but those supplies aren’t available yet.
Shipping Crisis in Review: It is well known that the pandemic resulted in slowing down terminals around the world due to lack of manpower; this generated the initial port congestion from 2020. Then in 2021, the largest terminal in China was shut down, causing further disruptions and ripples through the supply chain.  COSCO, the Chinese shipping conglomerate and world’s largest container terminal operator, owns 51 container terminals around the world. The problem is that containers are not returning from the U.S. and Europe as they usually do, but are going directly to China, often empty, creating further disruptions. 

It is expected these problems will persist at least through the first quarter of 2023, but the fact that the Christmas season is nearly here only augments the problems. For example, freight rates from New York to the Middle East were $1,300 in March 2020, and have ballooned to $7,700 in August 2021, a 592% increase. Los Angeles was $3,000, now $8,600, which is an increase of 717%. Obviously, shipping companies are raking in record profits, and any new ship and/or container production won’t be online until 2023 as well, therefore this problem will persist.

These problems make rice trade, and the commodity trade in general, exceptionally difficult. The low margins associated with commodities often cannot afford the extraordinary price increases. The Federal Maritime Commission in the US, and equivalent bodies throughout the world, are mobilizing Advisory Committees in order to address these significant global concerns—not just in the name of trade, but in the name of food security. The purpose of these Advisory Committees will be to focus on policies that relate to reliability, fairness, and the competitiveness of freight lines. It is our hope that some sort of resolution can be found quickly—there is sufficient rice supply to provide food security around the world—but getting it where it needs to be, when it needs to be there, at a price that can be paid, is an entirely different situation.

In Asia and specifically Thailand, this problem is coming home to roost. Shipments of Hom Mali have dropped on account of no workers due to COVID-19, and freight rates increasing by more than 5x in recent months. This makes the price simply unaffordable due to logistics costs, therefore, preventing shipments to the United States, Thailand’s largest customer for Hom Mali rice. Prices are now $700 per ton, down from $900 per ton earlier this year. Prices for Thai 5% held mostly steady at $390 per metric ton, Viet 5% to just over $395 per metric ton, and India remained at $380 per metric ton.

Export Sales: Net sales of 49,500 MT for 2021/2022 were primarily for Haiti (15,200 MT, including decreases of 100 MT), Honduras (15,000 MT), Japan (12,500 MT), Canada (2,500 MT), and Saudi Arabia (1,400 MT). Exports of 38,600 MT were primarily to Haiti (15,200 MT), Japan (12,500 MT), Mexico (4,800 MT), Canada (2,200 MT), and Saudi Arabia (1,900 MT). 

In the futures market, average daily volume was down 16% to 779, while Open Interest was up 2% at 7,870. The September contract dropped 1.95% to $13.055, while the November contract dropped in similar fashion, down 1.88% to $13.300.
Pictured above: The Clipper Houston vessel being loaded with 27,500 tons of long-grain rice to Venezuela, at the IFG Facility in the Port of Lake Charles, Louisiana.
Below: Francisco Metivier, quality control for GSI Food in Venezuela shows off his cooking skills with a taste test of Louisiana rice. Francisco observed the loading of the Clipper Houston vessel.
Above: South Louisiana Rail Facility in Laccasine, LA, backloading 27 rail cars for Mexico after dodging Hurricane Ida.
Ronnie Berry in Missouri, harvesting his 47th rice crop in his CLAAS Combine. Berry is harvesting Rice Tec 7321, the combine grain tank holds more rice than the bob trucks that he used to haul to the bins with. 
Live Cooking Classes in Mexico Continue with Success
Yesterday, Chef Pablo Marti, winner of Survivor Mexico 2021, conducted a live cooking class via Consume Arroz USA's Instagram account as part of the activities of the digital campaign that USRPA conducts in Mexico.

Chef Pablo demonstrated the Yakimeshi rice recipe, which was very popular while he participated as a contestant in Survivor Mexico this past season. More than 3,000 people viewed the class and Chef Pablo engaged with the audience by answering questions not only about the preparation of the dish and his personal life, but also explaining how to identify U.S. rice in the retail stores.

USRPA congratulated Chef Pablo on winning Survivor Mexico and looks forward to working together through December 2021 on Consume Arroz USA's campaign.
Congratulations to FECARROZ's New Executive Director
The US Rice Producers Association congratulates and gives a strong welcome to the new Executive Director of FECARROZ, Juan José Contreras Rodríguez.
Mr. Contreras studied at the University of Costa Rica and graduated as an Agricultural Engineer with an emphasis in Agricultural Economics and Agribusiness. Contreras also has a master's degree in Agribusiness Management and is a few months away from obtaining a degree in Agricultural Business Administration.

Contreras has an impressive professional history which includes working at the Macroeconomic Statistics department of the Central Bank of Costa Rica and then continuing in Mexico as General Manager of the Agritech NST and Cristal Vitro México.

Contreras currently serves as the Executive Director of the National Association of Industrialists of the Rice Sector of Costa Rica (ANINSA) as well as serving as the Executive Director of the Central American Rice Federation (FECARROZ).
What Does COVID Have To Do With Agriculture? Everything
 At the end of August 2021, the number of COVID-19 cases in the US continues to climb, though the pace of increase is lower than it was two weeks ago. US deaths due to this disease have now exceeded 637,000 and that number is increasing by nearly 9,000 per week. The percentage of people in the US who have received at least one dose of the vaccine is 52.

You might ask, “What does this have to do with agriculture policy?”

Our response is, “Everything.”

In an earlier article we made the humanitarian argument for eliminating COVID-19. This article makes the economic argument.

COVID-19 is disrupting supply chains around the world and sooner or later it will disrupt agricultural supply chains as well.

Disruptions on the production side of agriculture could come when a piece of farm machinery breaks down as one part quits working. 
This report provides trade data on Vietnam's monthly rice exports by grade and destination and weekly export quotes for rice by grade.
Arkansas Rice Update
By: Jarrod Hardke, Nick Bateman, & Scott Stile

With Hurricane Ida looming, all eyes are on the path it will take. Current expectations are for an eastward shift that will catch the southeast and eastern portions of the state.
Cornerstone Trade Update
Hurricane Ida damages Louisiana grain terminal, disrupts exports
The FAO All Rice Price Index (2014-2016=100) averaged 97.9 points in August 2021, down 3.3 percent from July and its lowest level since May 2017.
Upcoming Events
Sep. 10, 2021
California Rice Pest Management Course:
Hamilton Road field, Biggs. PCA and CCA credits are available. Bring your boots for this hands-on course – event details and registration
Oct. 7, 2021
University of Arkansas Virtual Rice and Soybean Field Day (tentative date)
Oct. 14 - 17, 2021
The 84th International Rice Festival: The rice festival will return to Crowley, Louisiana, after being canceled last year due to the COVID-19 pandemic.
Feb. 20-24, 2022
2022 Rice Technical Working Group: Hot Springs Convention Center in Hot Springs, Arkansas.
Conference Hotel: Embassy Suites Hot Springs.
The University of Arkansas is hosting this biannual meeting — event information
Mar. 4, 2022
34th Annual Arkansas Agricultural Hall of Fame Induction Luncheon: Embassy Suites, Little Rock, Arkansas – event details and tickets (RESCHEDULED)

25722 Kingsland Blvd.
Suite 203
Katy, TX 77494
p. (713) 974-7423
f. (713) 974-7696
e. info@usriceproducers.com
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