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In This Issue:
- Market Update: Some Farmers Cautiously Optimistic Despite Obstacles
- USRPA Hosts Moroccan Delegation
- Washington, D.C. Update
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This week in the Port of Lake Charles, the South Louisiana Rail Facility loaded 22,000 tons of rough rice onto “Shakespeare Bay” vessel bound for Colombia. This completes the 44,000 tons sold under the U.S.-Colombian Free Trade Agreement TRQ. SLRF has shipped the entire inventory of its membership who wanted to participate in the export markets this season. While 2022 planting is well underway with plenty of concerns with the cost of fuel and fertilizer, marketing the entire old crop is not one of them. | |
Market Update: Some Farmers Cautiously Optimistic Despite Obstacles | |
Ground is being worked up throughout the delta in the midst of global uncertainty. Farmers have never been so indecisive in the past 25+ years. Fuel and fertilizer costs continue to be a moving target even as rice is going in the ground. Expectations remain that the crop will be approximately 15% smaller than last year, which is keeping upward pressure on paddy prices at the moment. Next week’s USDA acreage report will reflect the situation. In Texas, prices have jumped up to $17/cwt. In Mississippi, Arkansas, and Missouri, prices are in the $15-$15.75/cwt range. Further bolstering higher paddy prices is the drought in the Mercosur, where Brazil’s rice production is still a big question mark. This will likely create opportunity for milled long grain to re-enter some of the markets that Brazil has encroached on in recent years.
In Asia, the market has been holding steady with each passing week. Prices in Thailand are unchanged from last week at $417 pmt. Viet pricing sits at $420 pmt, also unchanged. India is also the same as last week, registering at $355 pmt, and Pakistan just below at $350 pmt. The crisis in Ukraine has not significantly impacted the international rice trade yet, as the major volatility has been hyper-focused on wheat and fertilizer.
Good news coming out of Europe in that the U.K. retaliatory duties on U.S. rice are expected to be lifted on June 1. While the U.K. is not a large consumer of U.S. rice, it has consumed a significant portion, and not capturing this business since June of 2018 has hit the U.S. market unfavorably. But with free access returning, there is optimism that reinvigorating this long-term relationship will help support milled rice prices for the U.S. industry.
A GAIN report was published for Pakistan this week, and it shows record production of 9 million metric tons coming from the region. The increased production is based on better varieties with higher yields, and better agronomic practices being introduced. This increased production corresponds to an expected increase in exports, pegged at 5 MMT for the coming year. Most of this rice will find its way to China, Kenya, UAE, Afghanistan, and Saudi Arabia.
The weekly USDA Export Sales report shows net sales of 83,800 MT, which is up noticeably from the previous week and up 44% from the prior 4-week average. Increases were primarily for Japan (38,000 MT), Colombia (22,000 MT), Haiti (15,200 MT, including decreases of 100 MT), Canada (2,200 MT), and El Salvador (1,500 MT). Exports of 54,400 MT were down 8% from the previous week and 22% from the prior 4-week average. The destinations were primarily to Mexico (27,800 MT), Honduras (12,100 MT), Haiti (7,100 MT), Canada (3,000 MT), and Jordan (1,400 MT).
In the futures market, average daily volume dropped 23%, down to 411. Open Interest held steady, dropping only 1% down to 9,701. The May 22 contract increased slightly, now up to $16.01, with the Mar 23 contract increasing up to $16.315.
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From left to right: Craig Hamm, RiceTec Field Rep for east TX and southwest LA; RiceTec Intern; Mohamed Fardaoussi, USDA/ATO Representative; Mohamed Laarbi Ghazouani, Director of Operations, Mundiriz; Jose Maria Garcia Redruello, CEO, Mundiriz; Mark Pousson, SLRF Manager and USRPA Board Member; Stuart Hoetger, USRPA; and Grace Wang, USRPA. | |
USRPA Hosts Moroccan Delegation | |
This week USRPA hosted a Moroccan delegation of executives from Mundiriz, a subsidiary of Ebro Foods and the largest mill in Morocco, to visit U.S. rice producing states and conduct meetings with mills, rice producers and industry groups. The trip began with meetings with producers and mills in Arkansas, including stops at Producers Rice Mill in Stuttgart, AR and Ralston Family Farms near Atkins, AR. The group then headed to Louisiana and ended with a port visit in New Orleans, showcasing an in-depth overview of the U.S. rice supply chain. The new crop situation in U.S. and global market and economic issues impacting rice business were among the many topics discussed.
The Louisiana portion of the trip included stops at the South Louisiana Rail Facility and the Port of Lake Charles, where the group learned more about the paddy rice export process and saw a vessel loading with paddy rice headed to Colombia buyers. The group also met with Russell Marine Group in New Orleans and took a river tour which demonstrated the ins and outs of the logistics involved with U.S. rice industry. The delegation was especially impressed with the automated and organized operation and discussed new opportunities that may be suitable to their market.
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From left to right: Stuart Hoetger, USRPA; Chris Lee, Black River Commodities; Mohamed Fardaoussi, USDA/ATO Representative; Jose Maria Garcia Redruello, CEO, Mundiriz; Mohamed Laarbi Ghazouani, Director of Operations, Mundiriz; Marcela Garcia USRPA; Mollie Buckler, USRPA; and Eric Hover, USRPA Board Member. | |
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This week the Senate held confirmation hearings for Judge Ketanji Brown Jackson to the Supreme Court. President Biden nominated Judge Ketanji Brown Jackson to the nation’s highest court after Justice Stephen Breyer announced his retirement in late January. Judge Jackson currently serves on the United States Court of Appeals for the D.C. Circuit, where she was confirmed on a 53-44 Senate vote last year.
Also this week, the Senate Ag Committee approved the nomination of four nominees for Commissioners to the Commodity Futures Trading Commission. Christy Romero, Kristin Johnson, Kristine Mersinger, and Caroline Pham now await consideration by the full Senate.
The House Ag Committee announced two hearings on the Farm Bill for next week. These hearings will be on the Supplemental Nutrition Assistance Program and horticulture. The House has already held hearings on commodity programs, rural development, and climate change as it prepares to draft a new Farm Bill next year.
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Food and Ag Regulatory and Policy Roundup | | |
Pakistan: Grain & Feed Annual
Rice production is forecast at record 9 MMT, which will drive exports to a projected 5 MMT.
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Philippines: Grain & Feed Annual
FAS Manila forecasts Market Year (MY) 2022/23 milled rice production will reach 12.4 million metric tons (MT), flat with the previous year’s near-record high. The Philippine government’s support programs will help rice farmers partially offset rising input costs. Rice imports are seen at 2.8 million MT, 200,000 MT lower than MY 2021/22.
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South Africa: Grain & Feed Annual
South Africa’s rice imports are expected to increase by three percent to 1.1 MMT on a marginal growth in demand.
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Tanzania: Grain & Feed Annual
Rice and wheat imports will continue to rise in MY2022/23 to 1.23 MMT and 250,000 metric tons (MT), respectively to offset domestic production declines and satisfy rising food demand.
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Arkansas Rice Update: March 25, 2022
by Jarrod Hardke, Scott Stiles,
& Tommy Butts
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RiceTec Field Day (in-person), Harrisburg, Arkansas | |
USRPA does not discriminate in its programs on the basis of race, color, national origin, gender identity, sexual orientation, religion, age, disability, political beliefs, or marital/family status. Persons who require alternative means for communication of information (such as Braille, large print, sign language interpreter or translation) should contact USRPA at 713-974-7423. | | | | |
