W20: Rice Update

In W20 in the rice landscape, the USDA, in its May report, forecasts global rice production in the 2022/23 season to fall by 5.4MMT to 508.4MMT. However, global rice production in the 2023/24 season is expected to recover strongly and increase by 12MMT to a new record 521MMT. The largest rice production increases are forecast for the Philippines, China, India, Indonesia, Myanmar, Thailand, and Bangladesh. However, production forecasts for 2023/2024 may be revised downwards due to the risk of drought in the main producing regions of Asia as a result of the El Niño meteorological phenomenon. Experts even predict a particularly severe weather event in 2023, which is expected to have an impact on exportable supplies in 2024. Furthermore, the USDA forecasts global rice consumption in the 2023/24 season to increase by 500K MT to a record 520MMT, where the majority of consumption is expected to be used for food and broken rice as animal feed. Also, the USDA expects global rice stocks in the coming season to decrease by 2.5MMT to 167MMT, with China and India accounting for 81% of the inventories. According to the USDA forecast, global rice imports in MY 2024 are expected to be mostly flat from 2023 at 55.8MMT, as lower imports in Southeast Asia will be offset by increased demand from sub-Saharan Africa and South Asia. In April 2023, global rice prices increased by an average of 3.5% due to strong Asian and African demand, while exportable supplies are tighter, at least until the new crop starts to arrive in June 2023. Due to the fall in rice production, an upward trend in global rice prices is expected in the coming months.

Two flood-resistant rice varieties, SUB1 gene, and scuba rice, are helping farmers in Africa to improve productivity, with huge potential returns for countries affected by climate change, such as Madagascar, Mozambique, Nigeria, and Tanzania, which are among the most flood-affected countries in Sub-Saharan Africa. AfricaRice and IRRI indicate that the rice they developed could survive for more than two weeks under complete submergence, whereas existing rice varieties die after one week of flooding. These varieties can generate up to 2MT/ha more than rice varieties vulnerable to flooding. Therefore, during the flood season, the new varieties sustain productivity, helping farmers maintain a stable income in both stressed and non-stressed years. In the first four months of 2023, Thai rice exports reached 3.05MMT, 39.66% of the total shipments achieved in 2022, and resulted in increased income and confidence among farmers. According to Alongkorn Ponlaboot, the continuous demand for rice has driven the prices of almost all rice types in Thailand to exceed the guaranteed income prices, particularly jasmine rice, which has the highest production volume. The Thai government formed a Market-led Production Strategy that aims to enhance cooperation with the private sector and promote the development of rice varieties that have high productivity per unit of land and meet market demand. It also focuses on upgrading large-scale rice fields and increasing marketing activities in foreign countries while maintaining a competitive exchange rate. These efforts have led to a continuous expansion of rice exports from the previous year until now, resulting in increased income for farmers.

The USDA indicates that 83% of US rice was planted and 65% had emerged, both well ahead of their average pace. Also, 70% of the US rice crop was rated good to excellent. CONAB reports that In W20, 2022/23 Brazilian rice harvesting had reached 95.8% of the planted area, an increase of 1.3% points WoW and up compared to 94.7% achieved in the same period in 2021/22. Brazilian rice harvesting has already been concluded in Goiás, Santa Catarina, and Tocantins. Maranhão is further behind, with 58% of the harvested area. ABIARROZ indicates that Brazilian rice (husk base) exports in April 2023 totaled 140.2K MT, valued at USD 47M, more than double the April 2022 shipments of 67.8K MT and up 158.24% YoY in value. Also, Brazilian rice exports regained momentum in April after two months of shipments below 120K MT. Brazilian processed rice shipments in April 2023 amounted to 22.4K MT, valued at USD 10M, with exports mainly destined for Peru, Saudi Arabia, the US, Cape Verde, Panama, Canada, Bolivia, Angola, Trinidad and Tobago, and the UAE. Lastly, PSA reports that Philippian rice stock at the beginning of March 2023 was 1.41MMT, down 7.5% MoM and 13.7% YoY, with rice in households dropping 7.5% MoM and 6.2% YoY, in the commercial sector falling 8.7% MoM and 19.2% YoY, and NFA depositories declining 1.6% MoM and 33.9% YoY.