The United States seems to be the only major rice-growing country in the world that has seen a reduction in acreage – and, thus, will produce less rice – in calendar year 2017.
That means there is likely to not be much draw down in the record world supplies that currently exist and not much room for improvement in world rice prices, according to Nathan Childs, agricultural economist with USDA.
“We’re looking at record supplies; though they won’t be up by much from 2016-17,” says Dr. Childs, a USDA’s rice analyst for more than two decades. “Many might remember the big supplies at the turn of the century that we worked on several years. It took several years to work those supplies down.”
The featured speaker during the University of Arkansas’ System Division of Agriculture’s Food and Agriculture Webinar on Thursday (July 27), Dr. Childs said producer support programs, especially in China and India have kept rice acreage in those countries high.
“China's price support for rice went up slightly, I think a little bit over 1 percent, not much, but just a little,” he said, during the webinar moderated by Bobby Coats, professor of agricultural economics and agribusiness at the University. “India's back up. It's not a record area, but about 44.5 million hectares (10.99 million acres). China's up fractionally, nowhere near record though.”
Thailand recovering from drought
Thailand also appears to be well on the road to recovery from the woes that have beset its rice sector in recent years. Abundant rainfall has boosted its reservoir levels and, thus, it’s rice acreage is back to normal after severe drought two years ago.
In the Western Hemisphere, Brazil is now the largest rice-producing country in the world outside of Asia. Dr. Childs said USDA-ERS analysts see Brazil’s rice area increasing. “There’s more use of rice as a second crop or as a first crop, but we see the crop coming down as it returns to a more normal yield.” (Brazilian farmers can get two and sometimes three crops a season depending on the region.)
“Look at some of the economic rationale for contraction,” he said. “Remember we talked about global areas up in 2017-18, but not everywhere. The U.S. harvested acreage will be down 20 percent from a year ago.”
Low prices for long grain and heavy rainfall at planting reduced acreage – mostly in the South, but also California had heavy rainfall in the winter – reduced the harvested area. “The planted area didn't come down as much, but the abandonment is higher than typical.”
Egypt, the largest growing country in North Africa, is expected to see its acreage drop from a massive record in 2016-17. The government is also imposing strict export area controls that aren’t always evenly applied.
Skirting the export rules
“They are going to be stricter, but they're often violated and then there was some shift in planting,” Dr. Childs noted. “Egypt’s had restrictions on rice planting for decades and typically grows far more rice than allowed under the government maximum.”
The Philippines, traditionally a large producer and consumer of rice, is expected to be down about 3 percent. Japan’s production is continuing to decline based on a long-term reduction of its rice acreage. Indonesia’s is as well, but the decline is almost inconsequential, according to Dr. Childs.
One of the biggest percentage reductions could occur in Cuba where farmers are expected to harvest a 15 percent smaller rice crop this year due to the impact of negative weather the last two seasons.
“I think it’s the lingering effects of severe hurricanes that went through last fall,” he noted. “They had come off a severe drought from El Nino. They are the major importer in the Western Hemisphere.”
South Korea has stocks concerns with consumption declining for food and food use declining.
To watch Dr. Childs’ presentation, click on https://youtu.be/A0wtzvmY0OM.