Heavy world rice supplies weigh on prices

BakingBusiness.com, March 16, 2010
by Jay Sjerven

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Despite a minor reduction in the U.S. Department of Agriculture’s forecast for 2009-10 world rice endings stocks, supplies remained ample and continued to pressure world rice prices, including U.S. rice futures prices as traded in Chicago.

The U.S.D.A. on March 9 projected world rice 2009-10 ending stocks at 90.93 million tonnes (all volumes for rice are expressed on a milled basis), down 1.57 million tonnes from the February forecast and down 0.29 million tonnes from 91.22 million tonnes in 2008-09. The U.S.D.A.’s world rice production forecast, though, increased 4 million tonnes from February, to 440.28 million tonnes. The primary reason ending stocks were forecast to decline in the face of an increase in production was a smaller 2009-10 carry-in estimated for China. That country’s 2009-10 rice beginning stocks were estimated at 38.9 million tonnes, down 4.02 million tonnes from the previous estimate. The world rice inventory at the beginning of the current year was estimated at 91.22 million tonnes, down 2.12 million tonnes from February, with the lower estimate for China offsetting higher estimates for other producers.

World rice production projected at 440.28 million tonnes would fall just 2% shy of the record world crop of 447.42 million tonnes harvested in 2008-09. World rice consumption in 2009-10 was projected at a record 440.57 tonnes, up 3.45 million tonnes from the February forecast and up 3.42 million tonnes, or 1%, from the previous record of 437.15 million tonnes in 2008-09.

World rice exports in 2009-10 were projected at 30.56 million tonnes, down 0.49 million tonnes from the February forecast but up 1.84 million tonnes, or 6%, from 28.72 million tonnes in 2008-09. Rice exports in the current year were forecast to be the third highest on record following 31.26 million tonnes in 2007-08 and the record 31.499 million tonnes in 2006-07.

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