Due to the tragic terrorist attacks on the World Trade Center in New York City and the Pentagon in Washington D.C., any U.S. rice cash trading was silenced early this week.
The events had widespread impact. U.S. government offices closed, delaying the anticipated USDA World Supply and Demand Estimates report until Friday (September 14). U.S. financial markets including the Chicago Board of Trade where U.S. rice futures trade were closed.
At this point it is still to early to determine what economic impact the attacks will have on an already fragile U.S. economy. Consumer reaction in the wake of the national tragedy will be an important variable. Most rice industry participants believe that the incident will have little impact on the rice industry given large global supplies. Following two days of inactivity the Chicago Board of Trade will reopen on Thursday (September 13). Other U.S. exchanges are also expected to reopen this week.
In an effort to assure the country that the banking system would be protected, the U.S. Federal Reserve said in a statement Tuesday that it would be ready to give financial assistance to banks if necessary.
According to figures from the U.S. Crop Progress Report (September 10), the U.S. crop condition for rice is nearly unchanged from last week. Seventy-nine percent of the U.S. crop remains in good to excellent condition. The U.S. rice crop is now 37% harvested, a 9% gain from last week, and 3% above the five-year average. Texas (84%), Louisiana (82%), Arkansas (28%), Mississippi (24%), and California (5%) all report harvest activity.
Vietnamese rice prices were steady to slightly lower this week on continued slow demand. Ships still loading rice at Saigon port bound for the Philippines, Cuba and Iraq, are helping to keep prices from sinking further. Exporters are still short on supply, and farmers are holding most of the grain. Prices are expected to ease lower as existing contracts are completed.
Thai rice prices were mostly steady this week. Demand for small quantities of milled rice and demand for parboiled are helping to support prices. The bulk of the overall demand for Thai rice is from Nigerian importers seeking parboiled rice. Thailand is still seeing more activity due to elevated rice values in Vietnam, but the market has generally been slow. Thai parboiled rice is quoting this week in the $226-230 per ton range FOB.
The Prime Minister of Thailand has announced that the government will punish exporters of Thai fragrant rice found to have mixed lower grades of rice or other substances in with their fragrant rice exports. The Prime Minister emphasized that the practice of mixing is damaging Thailand's reputation for quality, and hurting the industry. Thai fragrant rice prices have been dropping, export quantities have been lower, and the country may have a considerable quantity of the rice left unsold at the end of the season.
Thailand exported 4,517,095 tons of rice during the period January 1-September 9, a 584,418 ton increase from the same period in 2000.
Trading activity in front of the new crop in Pakistan is limited. Monsoon rains have delayed the rice harvest, and traders expecting supplies to begin entering the market in late August have had to postpone their selling efforts. Traders now hope demand will pick up in early to mid October, when fresh supplies are expected to enter the market.
Despite higher expectations with surging Thai parboiled prices, high Viet rice values and an extremely busy loading schedule in Burma (all aspects expected to make Indian rice more attractive) demand in India remains very sluggish.
It appears that Nigerian buyers would rather pay higher parboiled prices in Thailand than turn to India for a supply of questionable quality. Some buyers are reportedly buying smaller tonnage from India to test quality and exporter performance. Although Burma's current port schedule is busy, exporters in the country are still making sales of white rice. Prices in Burma remain low. India continues to wait and hope for a turn.
On September 7, the government of India announced that they were raising the minimum support prices (MSP) for rice. The MSP is the price at which the government procures rice from farmers.
Some analysts believe that higher MSP in India is largely political, as elections are nearing in two major rice-growing states. Many traders and analysts express that the increase will not help boost exports, but will only add to India's already overflowing stockpiles of rice. Some analysts are projecting that India's rice stockpile will reach 30 million tons by the end of 2001.
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