New crop harvesting activity should begin in Texas and Louisiana by the second week of July. The USDA reported that the 2001 rice crop is now 6% headed, equal to the five-year average as of June 24. Texas and Louisiana show 22% and 27% heading respectively. The crop condition is nearly unchanged from last week, with 75% reporting in the good to excellent range, a 1% decline from last week.
In the Acreage report, released June 29, the USDA raised the U.S. planted area estimate from its March 30 report for all rice by 160,000 acres to 3.25 million acres. The report was seen as bearish by the trade as many were expecting the increase in the 100,000 to 150,000 acre range. While long grain area was increased by 242,000 acres to 2.625 million acres, medium grain and short grain acreage was estimated lower to 600,000 and 25,000 acres respectively.
The U.S. House of Representatives voted to approve a $5.5 billion farm aid package on Tuesday, June 26. The bill will help producers cope with low prices and higher input costs. Of the total, $4.6 billion is set-aside for the growers of grain and cotton. The bill is set to move on to the U.S. Senate, where farm groups hope to increase the funding level. Full approval by the Congress is expected before the summer recess, meaning the money would be paid out by September 30.
The USDA reported U.S. export sales of 30,800 tons of rice June 15-21. These sales were 58% below sales of 72,600 tons reported last week. The major buyers were Panama, Mexico, Honduras and Saudi Arabia.
On Thursday, June 28, Uzbekistan announced purchases totaling 51,348 tons of U.S. medium grain #1, 4% hard milled in 50kg bags through the $10 million P.L. 480 food aid tender. The rice is to be packaged in 50kg polypropylene bags. The prices ranged from $191.87 to $208.27 FAS from Sacramento, Stockton, and San Francisco bay area ports.
According to a representative from the United Nation's World Food Program (WFP), the severe drought that hit North Korea has ended. The WFP and the UN's Food and Agriculture Organization are assessing the damage and impact of the drought, but it now appears that a campaign to replant rice seedlings in May and June was successful. The rice harvest is not expected until November. The WFP recently made an appeal for an additional 250,000 tons of grain to cover an expected shortage in the last quarter of the year.
Vietnamese rice prices were steady to lower this week. Supply from the summer-autumn harvest, and a weakening Viet currency is beginning to put increasing pressure on prices. Most completed contracts are for small quantities. Vietnamese rice prices are expected to drop further in the next few weeks as supply pressure builds. This downward price movement will likely bringing new buyers with larger orders into the market.
The main destinations for Vietnamese rice shipments this week are Cuba, Africa, and the Philippines. Rain in the country has slowed rice-loading activity. Traders noted a sale of 5,000 tons of Viet 5% broken rice this week for July shipment to Africa at $150 per ton FOB. Viet 25% broken is quoting in the $131-133 per ton range FOB.
During the first six months of the year, Vietnam exported approximately 2.18 million tons of rice with the value of $341 million according to Vietnam's General Statistics Office. That figure represents an increase of more than 34% from volume totals for the same period in 2000, but an increase of only 6.3% in value.
Thai prices are steady to higher this week. Despite a lack demand for large tonnage, exporters are completing a sufficient number of small contracts to support prices. Thai exporters are also buying rice in the local market to cover upcoming shipments of 100%B to Iran. Aware of the tonnage needs and shipment details, many local traders are squeezing exporters-- offering the rice at a higher price. Additional support comes from steady sales of Thai parboiled to Nigeria and Senegal, and sales of brokens to Africa.
Thailand continues to hold talks with North Korea for the sale of up to 400,000 tons of rice. So far the talks have been unsuccessful, as Thailand reportedly is looking to secure payment for some of the rice in hard currency.
Rice prices in Pakistan remain firm on strong domestic demand and very limited stocks for export ahead of new crop. Pak 25% broken rice quoted this week at $155 per ton FOB, well above the FOB values for 25% broken rice in Vietnam ($132) and India ($137).
Rice prices in India are mostly unchanged as export demand for 25% broken rice remains slow. There is some negative price pressure resulting from a weakening rupee against the U.S. dollar. Traders note some activity for parboiled rice, but the quantities purchased are small as buyers test the quality. India’s annual monsoon rains are making excellent progress and have covered nearly all of the country, according to chief Indian weather officials. India’s agriculture sector relies heavily on monsoon rains.
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