Global rice production and stocks are declining, but rice trade is flattening out due to bumper crops in key countries, according to an analyst with USDA's World Agricultural Outlook Board.
Speaking at the 2001 USA Rice Outlook Conference in St. Louis, the WAOB's Andy Aaronson projected world rice production for 2001 — 02 at 93.3 million tons, down 2.6 million tons from last year and the lowest production since 1997 — 98.
“Most of the dropoff in production is due to declines in the largest rice producing country in the world China, which is down 4.8 million tons,” Aaronson said. “But acreage is also dropping in Latin America and a lot of the rice acreage in Brazil is going to soybeans.”
Global rice stocks for 2001 — 02 are projected at 126.3 million tons, 11.3 million tons below last year, and a drop of 8 percent. And the world stocks to use ratio is just over 31 percent, the lowest it's been since 1984 — 85. “Stocks have been coming down, although they're still high, even when you remove China from the mix,” Aaronson said.
China's rice stocks more than tripled after May 21, 2001, when USDA adjusted the country's rice supplies dating back over 20 years.
China now holds 66 percent of the world's rice stocks, 84.6 million tons, while India holds 17 percent, 21.4 million tons.
“The major foreign exporters, including Vietnam and Thailand, hold less than 3 percent of the world stocks at 3 million tons. Major importers, including Brazil, Indonesia and Nigeria, Philippines, hold only 6 percent of the world stocks at just under 8 million tons,” Aaronson said.
World rice trade is estimated at 23 million tons for this calendar year and next, down from the record of nearly 28 million tons in 1998.
The large spike in trade in 1998 was caused by crop shortfalls due largely to the yield-reducing effects of El Niño.
Aaronson said that imports are flat because most countries are projected to produce bumper crops this year and next.
The largest importer of rice this year is expected to be Indonesia at 1.6 million tons, up marginally from the past two years, but down 72 percent from 1998.
Brazil's imports in 2002 are projected at 500,000 tons, the same as this year projected at closing but down 67 percent from 1998.
African imports have been strong in 2001, particularly in Nigeria, the Ivory Coast and Senegal.
Nigeria's imports are projected at a record 1.6 million tons in 2001 and are projected to remain strong in 2002.
Thailand is the world's largest exporter with exports projected at a record 7 million tons in both 2001 and 2002. Their largest markets are the Middle East, Europe and Africa.
Vietnam is the world's second largest exporter with exports projected at 3.6 million tons in 2001 and 4 million tons in 2002. But tight domestic supplies have pushed prices above Thai prices recently. Vietnam exported 3.47 million tons in the first 11 months of 2001, seven percent more than in 2000.
The largest markets are Iraq, Philippines and Indonesia.
“But Vietnam had damage from flooding in October, which affected the movement of rice across the state,” Aaronson said. “So right now, Vietnam is out of the export market until early 2002 when their spring crop comes off.”
The United States expects to export 2.7 million metric tons in 2002, the same as last year.
Thailand's commitments through Nov. 25 stand at 6.6 million tons compared with 5.7 million tons in 2000.
India has exported about 850,000 tons of non basmati rice and 350,000 tons of basmati rice during the current fiscal year (April-March).
India's exporters expect basmati exports to reach 1.75 million tons.
China exported 1.4 million tons though October, down 44 percent from 2000.
Global trade is projected to expand to about 30 million tons in 2010. Thailand will still be the world's largest exporter with exports of around 10 million tons — with a marketshare of 32 percent.
Vietnam will be the world's second-largest exporter at about 5.7 million tons — with a marketshare of 19 percent.
The U.S. share will drop to under 9 percent, down from 12 percent in 2002.
Sub-Saharan Africa will be the largest import market in 2010 with imports of 5.5 million tons.
Indonesia will the second-largest market with imports of 3.5 million tons.
Aaronson said the entry of Taiwan into the World Trade Organization will boost world rice trade by about 144,720 tons (brown basis).
Under the WTO, China has agreed to allow greater imports of agricultural products at lower import duties under a tariff-rate-quota (TRQ) system. For rice imports under the TRQ system, China will set a quota for the import of 2.66 million tons of rice in 2002 (evenly split between long and medium/short-grain) with in-quota import duty of 1 percent.
The import quota under the TRQ system for rice will eventually rise to 5.32 million tons in 2004. Private importers will be allowed to import half the total allowed.
Aaronson noted that China does not need to import all as pledged. “Much would depend on demand and supply and local prices. Right now, China's internal prices are very competitive with the world price and they are one of the world's largest exporters.”