The Rice Advocate, Vol. 17, Issue 43

Volume 17, Issue 43

October 29, 2020

In This Issue:

First Chinese Import of U.S. Rice Since Rice Protocol Established by USRPA & GACC
Rice Market Update
Rice Market & Technology Convention Goes Viral

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First Shipment Import of U.S. Rice Since Rice Protocol Established by USRPA and GACC

The first U.S. rice shipment arrived in Xiamen in Fujian Province of China this week thanks to two decades-long joint efforts by USDA FAS, US-China government authorities, and two rice industry organizations USPRA and USA Rice. The exciting news came along with the ongoing implementation of Phase 1 of the Chinese Trade Agreement.

The US Rice Producers Association has remained in contact with the importer Xiamen Mingsui Grains & Oil Trading Co. Ltd, who is the first importer that struck a deal with ADM and further distribute to a high-end food chain, Sungiven, 20 tons of Calrose rice. The container of 5kg packages of medium grain rice arrived at the Chinese port and cleared customs smoothly according to the importer.

A group of Chinese importers, including Xiamen Mingsui, visited U.S. rice states last December on a USDA reverse trade mission organized by USARF. Several staff and representatives of the US Rice Producers Association joined the group in Louisiana and California where they met with importers and presented cooked rice samples. On a follow-up contact with the importer in May, Xiamen Mingsui mentioned that the conversation of potential import of 20 tons of Calrose was in progress with ADM. USRPA continued open communications with USDA staff in the Beijing embassy in an effort to facilitate the transaction. Despite the fact that both USDA and USRPA did offer assistance, the importer decided to continue on their own with ADM given the size of the business. Although there is still a dispute on the category of medium and long grain U.S. rice based on the Chinese rice code, the first medium grain was imported under long-grain due to its width-to-length ratio.

“The first commercial US rice shipment to China clears customs this week. China is the world’s top rice consumer-expect to build on this sale w/much more in the future. This is a good first step to what we hope to be many more shipments of high quality, nutritious & affordable U.S. rice,” said Secretary of Agriculture Sonny Perdue.

USRPA President & CEO, Dwight Roberts added, “China is a fascinating market and our more than twenty years of development work will generate even more opportunities for our farmers and mills.”

The US Rice Producers Association was the first rice organization that began researching the Chinese rice market over two decades ago. USRPA delegates traveled to China numerous times with the Emerging Markets Program funding to conduct a market study of both medium and long grain rice. The study indicated there was a demand for U.S. grown rice in China. USRPA then met with and initiated protocols with the General Administration of Customs of China (formerly called AQSIQ). USRPA’s efforts led to a visit of several U.S. rice mills by Chinese authorities to finalize the protocol.

USRPA representative, Stuart Hoetger (pictured left), with Mr. Ray Zhang of Xiamen Mingsui Grains & Oils Trading Co, Ltd. (pictured right) at a reception this past December.

Rice Market Update

With harvest complete, all focus has turned to selling this year’s augmented crop. The frenzy of the Brazil business has now subsided, and traders are now looking to the Iraq Grain Board for a tender announcement. While paddy exports still remain behind schedule, the pent-up demand to Mexico is finally coming to bear which should help move the market along. The milled business to Haiti has been on schedule but won’t be enough to compensate for the slower domestic demand on account of school, restaurant, and travel restrictions throughout the country because of COVID. The outlook remains positive, but that could change if we don’t see business materialize to Iraq in the near term.

In Asia, Vietnam continues to be pounded by terrible flooding, significantly impacting their ability to export. This has resulted in increased pricing from the origin, further distorting the price difference from Thailand. Available supplies in Vietnam have thinned at a time when millions of people in central Vietnam have been affected by these floods and landslides. India continues to work through the COVID-caused logistical issues, offering the lowest prices, and supplying the majority of African demand.

Export sales saw a major boost this week with net sales reaching 121,500 MT. Most of this activity is attributed to Haiti where demand had been slow, but fortunately is now picking up. Japan is the other cause for the spike in sales, as this destination moves thru its tender season. The robust demand to Central American will likely be sustained throughout the marketing year, as this region’s other favorite origin, Brazil will be unable to compete against US rice in 2020/21 and possibly even 2021/22. This is perhaps most clearly seen in the year to date demand in Costa Rica which is nearly twice what it was at this time last year.

Growers continue to look for price discovery in the cash market, but bids remain scarce as buyers struggle to determine the market direction in the immediate future. There has been little to no movement since harvest by way of cash prices.

Futures have a reflected a similar trend with open interest right in line with the 3-month average and the November contract basically flat since the beginning August. The appears poised to make a move, and we expect to see more price discovery take place in the weeks ahead as traders convert export sales to shipments.

Rice Market & Technology Convention Goes Viral

Last week the US Rice Producers Association launched its first in a series of Virtual Rice Market & Technology Convention seminars. Since the pandemic has made in person meetings and international travel impossible, USRPA has been providing virtual seminars for its members and affiliated industry throughout the world.

In this latest project, USRPA is presenting a variety of topics from world renown speakers in easy to digest seminars to our past and future RMTC attendees. Sponsors and Exhibitors of our postponed RMTC in Panama are also benefiting from the seminars as attendees are encouraged to visit the virtual booths and visit with them via Zoom.

The first RMTC Virtual Seminar featured a thorough examination of today’s world rice market. Dwight Roberts started with “The Perfect Storm Isn’t Over” – a look at how the pandemic and recent weather is affecting the US rice crop and what to expect. Stuart Hoetger continued with “Ongoing Harvest Update and Cash Markets” followed by Dennis DeLaughter’s presentation, “Rice Futures and the Market Fundamentals as COVID-19 Continues.” Milo Hamilton closed out the presentations with “Asian Rice Hovering over the Americas and World Markets.” The speakers concluded the seminar with a round table discussion, addressing questions and comments from the audience.

“These kinds of virtual meetings are important for the buyers and sellers of US rice as a part of the food supply chain during this disrupting COVID-19 pandemic, allowing for a needed exchange of market information,” commented Dwight Roberts.

The next seminar will be announced shortly and will feature speakers touching on topics involving the Mercosur rice market. The seminar will be open to all on a first come, first serve basis for the first 100 participants who register but will be made available for on-demand viewing on our website: www.RiceMTConvention.com.

For more information including links to last week’s video, you can visit www.RiceMTConvention.com. You can also follow us on Facebook for the latest announcements program updates.