The U.S. rice market continues to be very quiet. Bids for paddy remain firm because of tight long grain stocks ahead of the new crop. An actual shortage of ahead of the new crop is unlikely due to limited export demand. July futures prices reached seven-month highs on Monday (June 18), pushing to $7.01 per cwt level, before falling sharply on liquidation of the long position and lack of new buying interest to close at $6.32 per cwt on Wednesday.
Uzbekistan has announced a request for bids for U.S. #1 medium grain milled rice for delivery July 23-August 31, through the U.S. PL 480 food aid tender. Because the tender calls for #1 quality, the tonnage is likely to come from California. The total quantity is expected in the 45,000-50,000 ton range (milled basis).
After remaining steady for two weeks, the USDA lowered the world market price by $0.11 to $4.73 per cwt for long grain, by $0.13 to $4.01 for medium grain, and by $0.13 to $3.99 per cwt for short grain. The WMP for brokens is down $0.05 to $2.37 per cwt on Tuesday, June 19.
The U.S. 2001 rice crop continues to progress towards a good harvest, with 76% of the total crop now rating in good to excellent condition a 9% improvement from reports in 2000.
The USA Rice Federation and US Rice Producers Association were both in Washington D.C. this week to support U.S. President's Bush's proposal for Trade Promotion Authority (TPA). If granted this authority, the President will be able to negotiate with foreign countries on behalf of U.S. farmers.
Vietnamese rice prices are steady to lower. Traders report slow international demand for Vietnamese rice. New activity in the market is mostly limited to small tonnage. Most importers seeking larger tonnage will likely wait for the price to drop as pressure from the summer-autumn crop builds in the market. Prices are also under pressure because many millers are looking to release rice into the market to create storage room for the new crop. Vessel loadings for Africa and the Philippines, although weaker than last month, are helping to support prices.
While Vietnamese exports in 2000 reached only 3.4 million tons, Vietnam's Trade Minister is expressing optimism that the country will meet its export target of 4 million tons of rice this year. Vietnamese rice exports during the first five months of 2001 were 64% higher than the same period in 2000 at 1.79 million tons.
Following the recent government-to-government sale of 100,000 tons of Thai 100%B to Iran for July-September shipment, three private Thai exporting firms sold an additional 100,000 tons to the country. Thai 100%B prices are steady quoting in the $172-174 per ton range FOB. Parboiled prices remain steady on continued shipments to Nigeria. Overall, Thai prices are steady to slightly lower as loading activity for the Philippines nears completion and new sales are weak.
Thailand's Rice Exporters Association estimates that total 2001 rice exports will surpass the original goal of 6 million tons, and may actually end up in the 6.2-6.7 million ton range. Higher Thai export estimates follow expectations of lower domestic production due to severe drought in China, North Korea and South Korea. Between January 1-June 18, Thai rice exports totaled 2.89 million tons, compared to 2.69 million tons during the same period in 2000.
Because Pakistani rice supply is very tight, prices in the market remain firm. Traders indicate that the country's export season is nearly over, as nearly all the remaining supplies are needed to ship previously concluded sales. Trading activity is very light as cheaper rice is available from Asian competitors.
Although the prolonged drought will affect the country's rice production this year, meteorologists are now predicting that Pakistan will have a normal monsoon season. Even with a normal monsoon, irrigation water will remain scarce as it will take at least another year to bring water levels in the country's reservoirs to normal levels.
Rice farmers in Pakistan are still urged to switch to less water-intensive crops. In order to reduce drought-related losses in the country, the government of Pakistan has outlined plans to invest approximately $150 million on improving irrigation and water supply systems.
In order to improve the quality of rice offered for sale on the international market, and therefore improve the prospects for netting sales, the government of India has agreed to waive the "first-in, first-out" policy. This policy requires that the Food Corporation of India (FCI) to dispose of old stocks first before the newer stocks, hoping to minimize the deterioration of the grain. Despite competitive rice prices, India has not attracted buyers as few large importers are currently in the market. The USDA projects Indian rice exports in 2001 at 800,000 tons, down from 1.3 million tons in 2000.
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