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In This Issue:
- RMTC 2023 Featured Speaker: Norris Bond
- Market Update: WASDE Report: USDA Lowers Carryover Stocks by 6 Million Hundredweights, Surprises Market
- Washington, D.C. Update
- RMTC 2023 - All Booths Sold Out!
- Photo from Rice Country
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RMTC Featured Speaker: Norris Bond
"To Parboil or Not to Parboil, That is the Question"
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For decades people in the industry have debated as to which of two widely accepted methods of parboiling rice was superior, but it was always accepted that the benefits of the parboiling process itself were clearly understood.
Recent developments in the industry may have changed the parameters that have long been driving industry practices and procedures, forcing millers to reconsider the goals of parboiling and to develop new operational priorities.
The debate may not be over which method to use, but whether or not to parboil at all.
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Market Update:
WASDE Report: USDA Lowers Carryover Stocks by 6 Million Hundredweights, Surprises Market
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An interesting study was released this week outlining the optimal planting timeline in Arkansas. It showed that the highest yields are from fields planted between March 28th and May 20th. It also surveyed the weekly Crop Progress Report from 1981-2022, ultimately showing that there are typically 4.5 suitable fieldwork days per week. This is an important factor for producers to work into their planting models, as the weather has proven to be a consistent x-factor each and every year. This essentially means that if there are three full weeks left in the ideal range, there are actually only 13.5 productive planting days, instead of the assumed 21 days. That being said, Arkansas is showing 12% planted this week, Louisiana at 74%, Mississippi at 8%, Texas at 49%, and Missouri at 1%. California is still zero with the earliest field work just getting underway.
The WASDE Report was released this week. The surprise was that the USDA lowered carryover by 6 million cwt, which made rice futures rise sharply. The WASDE also raised exports by 2 million cwt and lowered imports by 2 million cwt, and raised domestic usage by 2 million cwt. All other details remain relatively flat, but the big surprise was the drop in carryout. It is fortunate that the crop is expected to return to its normal size.
The FAO Rice Price update for this month dropped 3.2% from last month but is 17.6% above this time last year. This number correlates quite closely to the 20% tariff that India put on most of their exports, thus bumping the price of all indica varieties from last year’s levels. The drop this month, however, was largely attributed to aromatic and japonica varieties because the available supply for japonica is tight awaiting new supplies. It is our expectation that prices will rise slightly in the coming FAO price index based on Indonesia’s entrance back into the market for indica rice to shore up emergency supplies.
A recent USDA GAIN report on Ghana highlights a favorable outcome from bilateral creditors and the IMF towards Ghana to help the country weather its economic storm. Because of this help, rice imports expect to remain stable. While the country is producing approximately 800,000 MT of milled rice this year, which is 16% higher than last year, the country is still very reliant on rainfall and imports. The country still needs to import 700,000 MT to fill its total consumption, and that number is expected to grow. Government and NGO support encourages farmers to plant rice over other crops, and this results in over 800,000 acres of regular production. Rice is the second most important cereal in Ghana and is a major staple food with per capita consumption now estimated at 95 lbs. The 2023 estimate of the population in Ghana is 34 million, with a 2.12% growth rate. Urban consumers represent 55% of Ghana’s population and account for about 80% of the total imported rice consumption, preferring imports due to their perceived higher quality. In years past, U.S. rice has enjoyed a strong market in Ghana, but due to a drop in quality and increase in prices, Ghana has found new trading partners in Thailand, Vietnam, Pakistan, and India. We do view Ghana as a growth market for U.S. rice though and are optimistic about trade opportunities on the horizon.
A GAIN report on Venezuela reports that the U.S. lost the paddy rice market because of its high prices, and a strong resurgence of rice acres in the country. Venezuela went from growing 240,000 MT rough rice in 2021 up to 424,970 MT of rough rice in 2022, an increase of 90%. Post forecasts a 7% decline in Venezuelan rice imports, down to 420,000 MT, and is based on the aforementioned growth of local production. Of the 450,000 MT that Venezuela imported this year, 49% was paddy, 47% was milled, and 4% was broken. 29% of this rice came from Brazil, 21% from the US, and 21% from Guyana. This country represents a more strong potential for U.S. rice and is an opportunity to develop more business.
Weekly export sales were ugly again, showing net sales of 37,500 MT, a drop of 65% from last week and 11% from the four-week average. Exports were 33,500 MT, a drop of 41% from last week, but up 7% from the four-week average. Overall exports are down nearly 40% this year. It is imperative that the U.S. regain market share in Central and South America so the domestic market and Haiti aren’t left doing all the heavy lifting.
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President Biden vetoes congressional resolution to overturn WOTUS rule
On Thursday, President Biden vetoed the House and Senate’s Congressional Review Act joint resolution, preserving his Administration’s revised definition of the Waters of the U.S. (WOTUS). The President cited the increased uncertainties H.J. Res. 27 would raise and the negative impacts it would have on preserving healthy wetlands as reasons for the veto. While there was bipartisan support for the joint resolution, the margins in both the House and the Senate were shy of a two-thirds majority to override the veto.
U.S. accuses India of underreporting wheat and rice subsidies
This week, the U.S. joined five other countries in filing a World Trade Organization (WTO) counter-notification against India. The US counter-notification is the first-ever counter-notification to be submitted to the WTO Agriculture Committee. It says India provided subsidies to rice producers which exceeded 78% of the value of production and to wheat producers in excess of 65%. The other countries who joined in the complaint include Australia, Canada, Paraguay, Thailand, and Ukraine. This action has led to calls for the Biden Administration to file a formal WTO case.
A WTO transparency obligation requires member governments to report trade subsidies to the relevant WTO body if the subsidies might have an effect on other members. Once a member files a subsidy notification, any Member may make a counter-notification where it feels that the notification filed is either incomplete or incorrect.
Senate Agriculture Committee announces upcoming farm bill hearing schedule
Last week, a tentative hearing schedule for the Senate Committee on Agriculture, Forestry, and Nutrition was announced. These hearings will be the first of the congressional session occurring at the subcommittee level as Congress prepares for the upcoming farm bill. The tentative schedule is as follows:
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April 19: Subcommittee on Nutrition, Specialty Crops, Organics and Research – nutrition focus
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April 20: Subcommittee on Conservation, Climate, Forestry, and Natural Resources – conservation focus
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April 27: Subcommittee on Commodities, Risk Management, and Trade – crop insurance focus
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May 2: Subcommittee on Commodities, Risk Management, and Trade – commodity group focus
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May 17: Subcommittee on Rural Development and Energy – broadband focus
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RMTC 2023 - All Booths Sold Out! | |
All of the booths for RMTC are sold out! Make sure to register and reserve your room for special group rate.Click on the link below to register for Puerto Vallarta tours and transportation. Private transportation is also available. | |
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Buhler & Agreeta visit the new rice mill partnership with the South Louisiana Rail Facility in Lacassine, Louisiana.
From left to right: Mark Heinen, SLRF board member; Radim Valo, Buhler Mechanical; Mark Pousson, General Manager, SLRF; Kyle Todd, SLRF board member/Secretary-Treasurer; Andy Sharpe, President/CEO, North American Region, Buhler Group; Corinna Baban, President, Agreeta USA; Michael Stephens, National Accounts Manager, Buhler Inc.; Mike Hafeli, Director of Grain Quality & Supply, Zurich/Switzerland; Don Gauthier, SLRF Board President; and Tony Godeau, SLRF board member.
Send us your rice country photos on Facebook, Instagram, or via email!
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Food and Ag Regulatory and Policy Roundup | | |
World Agricultural Production | | |
India: Grain and Feed Annual
Despite an erratic 2022 monsoon, Indian farmers realized good returns from rice over other crops. Farmers benefitted from high government MSP procurement for paddy rice and strong export demand.
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Grain: World Markets
& Trade
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Brazil: Grain and Feed Annual
Brazil is expected to produce its lowest rice crop in 25 years due to a period of prolonged drought in the south and low profitability for farmers.
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Arkansas Rice Updates from the Row Crops Blog
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FAO Rice Price Update March 2023
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May 30 - June 1, 2023
2023 Rice Market & Technology Convention
Puerto Vallarta, Mexico
More Information
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