The harvest is in full swing now, and seeing the rice arrive in the barn is a great success. Texas and Louisiana have reached what most agree are halfway there, and the market has remained fairly quiet so far at the $17.50/cwt mark. Arkansas farmers are optimistic about how their harvest will look and are excited to be out in the field in the coming days to begin recording their grades and delivering a new crop to mills and paddy exporters.
On the milling side, Iraq has helped generate business, orders from Haiti continue to be filled and domestic customers remain strong. There is no storm front in the news at the moment that should bring the market down, nor is there an extremely optimistic horizon either.
Stability would be an easy way to put it, although things may look different once our harvest is over here domestically, and the effects of the weak Indian monsoon hit production, exportable supply and prices in the coming months.
We had several conversations over the past week with people who wanted to get more details on the Indian monsoon situation and its impact on the global rice market. Although the potential for a significant crop reduction is real, we must point out that the monsoon is currently affecting plantings.
There’s still time for the weather to change, and the overall production numbers won’t surface until the crop begins to ripen. away from any official report.
That being said, India remains the leader in low cost at $355 pmt, the same as last week and the same for months now, plus or minus 5%. The same goes for Thailand, where fluctuations were minor from a year earlier, this week with prices reported at $415 pmt. Prices in Vietnam fell due to local factors, down to $400 pmt this week from closer to $410 pmt last week.
FAO’s August rice price update shows the total rice price index averaged 108.4 points in July, down 2.1% from June, but up 7.2% compared to the same period last year. Notably, the July drop is actually the first drop of the year.
Rice is definitely the outlier when it comes to inflation compared to other commodities due to the narrow band that the price has remained in, especially considering the rising cost of inputs like the fuel and fertilizers to grow the crop. We will see next week what new information the USDA rice outlook report may contain on August 16th.
USDA’s weekly export sales report points to 26,800 MT to kick off the marketing year. We recorded 18,000 MT for Haiti and 6,300 MT for Mexico. A total of 216,700 MT of sales were outstanding as of July 31 and carried over to 2022/2023. Cumulative exports in 2022/2023 totaled 2,749,200 MT, down 14% from the previous year’s total of 3,195,900 MT.
The destinations were mainly in Panama. August 1 exports of 1,700 MT were mainly destined for Canada (1,000 MT), Japan (200 MT), Poland (100 MT), Jordan (100 MT) and Guam (100 MT).