Market Update: Export Sales & Shipments Highest in Four Weeks

Volume 18, Issue 41

October 22, 2021

In This Issue:

Market Update: Export Sales & Shipments Highest in Four Weeks
Washington, D.C. Update
Local Celebrity Guests Promote Rice in El Salvador

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Market Update: Export Sales & Shipments Highest in Four Weeks

The harvest in Arkansas has rounded its final turn and is all but over the finish line. With less than 10% of the crop to go, the story hasn’t changed much from the beginning. Yields are high, quality is down, and the 15% reduction predicted from the outset looks to be pretty accurate. In fact, the October Rice Outlook pegs the reduction at just over 16% smaller than last year at 190.5 million cwt. There are reports of damaged rice on barges that were set for the Iraqi vessel, and despite the problems, the vessel has sailed. That being said, the hope to garner more milled rice business from Iraq is fading, as Iraq has found a supplier in Thailand for its long grain needs in the near term. There is a possibility that business may return in the first half of 2022, but until then, the milled rice business will look to Haiti and the domestic market.

The rain has finally found California, and the forecast in the West shows cloudy skies and rain throughout the week. The USDA has increased California's yield expectation up to 8,900 pounds per acre and is actually low according to industry. Yields like this would approach record levels and be very helpful in offsetting the lost acres due to drought. Containers remain an obstacle in the Port of Oakland, which is where the majority of California's medium grain exports go. Prices are firm as harvest hits completion and the rain arrives.

In Asia, prices haven’t changed since last week, and the market is firm. The undertone doesn’t show much weakening, as Viet prices well exceed Thai prices now, at $435/MT and $390/MT, respectively. India continues to push the envelope with loadings as they liquidate their third record crop in a row at prices around $360/MT.

A recent GAIN report on China reveals that India is now the top supplier to China, though nearly all of the product, 97% of it, is broken rice. This is indicative of China’s need for animal feed, and cheap brokens from India fits the bill perfectly. Officially, data shows that China’s largest import year was in 2017 in the amount of 3.99 MMT. So far in 2021, China has imported 3.2 MMT, or nearly 400 TMT per month. This puts them on pace for 4.8+ MMT by December. On the other side of the coin, Chinese exports have slowed by over 15% since last year, largely on account to losing customers to India because of their more competitive prices. Therefore, China is not only buying more Indian rice (brokens) as a substitute for corn in their feedstock, but not able to export their higher-priced rice because India is capturing their customers too. Reports show that Chinese domestic prices are responding and are falling off, but it will take a significant event to compete with India’s third record crop in three years.

Export Sales this week show net sales of 81,400 MT, up 54% from the four week average. Mexico procured 47,800 MT, Honduras (17,100 MT), El Salvador (9,000 MT), with smaller amounts from Jordan and Canada. Exports of (68,100 MT) were up noticeably from last week, and 79% over the four-week average. This is a result of shipments to Iraq (32,900 MT), Haiti (25,600 MT), Canada (4,000MT) Mexico (3,100 MT) and Jordan (1,000 MT).

The 54% increase in export sales from the four-week average is welcomed news to farmers, particularly a needed sale to Haiti of 25,600 metric tons. The unstable political chaos has brought security issues and a decrease in Louisiana rice exports especially during the past three months. The instability threatens Louisiana’s largest market. According to Supreme Rice Mill, one out of every three grains of rice produced in Louisiana is exported to Haiti. The successful efforts of the South Louisiana Rail Facility have been vital for Louisiana rice farmers, thanks to the 200,000 tons of paddy exports to Mexico and Central America that supports price in South Louisiana and East Texas. Marketing initiatives continue to produce positive results out of the Port of Lake Charles and by rail from the SLRF near Lacassine to Mexico. Next week a vessel is due in port to begin loading a 30,000-ton shipment destined for Honduras.

Active paddy exports out of the Port of Lake Charles, Louisiana this year have taken on added importance due to the instability and lack of sales in Haiti. Last month the South Louisiana Rail Facility loaded out 28,000 tons on this vessel for Mexico.

Washington, D.C. Update

A sign of future funding trouble became evident on Monday, October 18, 2021, when Senate Appropriations Chairman Leahy (D-VT) released the remaining 9 appropriation bills. Earlier, the Senate Appropriations Committee had approved several appropriations bills in a bipartisan process that included the Fiscal Year 2022 Agriculture Appropriations Bill. Currently, the government is operating under a CR which expires on December 3^rd. Senate Appropriations Committee Vice Chairman Richard Shelby (R-Ala.) released a statement critical of Senate Democrats’ posting of their Fiscal Year 2022 (FY22) appropriations bills:

“Chairman Leahy’s decision to unilaterally unveil partisan spending bills is a significant step in the wrong direction. This one-sided process has resulted in bills that spend in excess of the Democrats’ own budget resolution and fail to give equal consideration to our nation’s defense. Their bills are filled with poison pills and problematic authorizing provisions, and they remove important legacy riders on topics like terrorism, abortion, and immigration that for years have enjoyed broad support on both sides of the aisle.

A successful appropriations process rests on trust and bipartisan cooperation like we had in recent years under the Shelby/Leahy framework. Regrettably, we’re a long way from that now. If Democrats want full-year appropriations bills, they must abandon their go-it-alone strategy and come to the table to negotiate. We need a topline agreement that does not shortchange our nation’s defense and a willingness to set aside partisan politics. Only then will we be able to produce full-year bills for the American people. Otherwise, we will oppose these partisan drafts. The clock is ticking,” stated Vice Chairman Shelby.

The statement included a long list of provisions that are objectionable to Republicans.

AG COMMITTEE MARKUP

Today in a whirlwind of approval and consensus the House Agriculture Committee under the Chairmanship of Representative David Scott (D-GA) approved a bevy of bills. They include the following:

H.R. 4252, To provide additional funding for scholarships for students at 1890’s institutions;

H.R. 2361, Rebuild Rural America Act of 2021;

H.R. 5608, Chronic Wasting Disease Research and Management Act;

H.R. 3532, To require the Secretary of Agriculture to carry out a periodic wildfire assessment, and for other purposes;

H.R. 4489, National Forest Restoration and Remediation Act;

H.R. 5609, Cattle Contract Library Act of 2021; and

H.R. 5589, Pyrolysis Innovation Grants Act”.

Documents considered during the markup may be examined here.

Local Celebrity Guests Promote Rice in El Salvador

Last week, during the USRPA's digital campaign in El Salvador, Chef Juan Salomón invited Francisco Valencia to cook delicious rice with curry and salmon. Francisco Valencia is a well-known local TV anchor, radio host, film analyst, and now influencer with 32,300 followers on his Instagram account.

Also, Chef Juan Salomon invited Rodrigo Retana to cook a rice dish featuring eggplant and other vegetables. They accompanied the rice with a grilled tomahawk steak as Rodrigo Renata is a specialized steakhouse Chef.

The special guests are invited by our Chef as a way to inspire viewers to try new ways to cook rice and thus encourage sales. Likewise, the influencers place the campaign created hashtags and invite the audience to follow our profiles on Instagram and Facebook, growing the number of followers and engagements.

NRCS Announces Conservation Funding Opportunities for 2022

USDA is announcing fiscal year 2022 assistance opportunities for agricultural producers and private landowners for key programs, such as the Environmental Quality Incentives Program (EQIP), Conservation Stewardship Program (CSP), Agricultural Conservation Easement Program (ACEP), Regional Conservation Partnership Program (RCPP), and Agricultural Management Assistance (AMA) program. While USDA’s Natural Resources Conservation Service (NRCS) accepts applications for these programs year-round, producers and landowners should apply by state-specific, ranking dates to be considered for this year’s funding.

Read more about funding opportunities

Ray Stoesser Memorial Scholarship

In partnership with the US Rice Producers Association, the Stoesser family is offering a $5,000 scholarship to one deserving high school senior or current college student who is interested in or is currently pursuing a career in an agriculture-related field.

Click for More Information

Cornerstone Trade Update

October 22, 2021

Food & Ag

Regulatory & Policy Roundup

October 18, 2021

Colombia: Grain and Feed Update

In MY 2021/22, Colombian corn, rice, and wheat demand are forecast to recover as Colombia returns to pre-pandemic economic growth levels. Colombia's rice imports will be insignificant compared to past years, due to large domestic production in MY 2020/21 and low domestic prices that caused a 93 percent non-allocation of the U.S. rice tariff-rate quota in 2021.

Current Report

China: Rice Prices and Domestic Demand Shape Trade Landscape

As international rice prices gained competitiveness over Chinese rice prices, significant import volumes have entered China since November 2020. Using current customs data, India is now China’s top rice supplier, with broken rice accounting for 97 percent of China’s imports from the supplier. As Chinese rice prices lost competitiveness, exports slowed down from momentum seen earlier during the years of 2017, 2018, and 2019. With high animal feed prices, Chinese rice has been substituted for corn over the last year which has also had a tightening effect on China’s rice export capacity

Current Report

Thailand: Rice Price - Weekly

Export prices of white and parboiled rice increased one percent as the Thai baht strengthened against the U.S. dollar.

Current Report

Venezuela: Grain and Feed Update

Grain and feed news is positive this year in Venezuela. The forecast for winter crops is favorable due to sufficient rainfall resulting in above average yields for corn and rice. Trade with the United States will remain stable, led by paddy rice, yellow corn, and wheat in MY 2021/22. Furthermore, the market dollarization and a liberalized market for price setting allowed a recovery in corn and rice production and consumption, especially in urban centers among the middle class.