(Dwight Roberts, USRPA Consultant) Rice export deals to Iraq have been dominating the news recently as there have been many rumors and confirmed purchases over the past six weeks. Below is a review of what has been recorded so far, as significant quantities of rice have been purchased from the United States, Uruguay and Thailand recently.
See the table below:
The USDA released a WASDE report this week, focusing on reducing supplies due to shorter crops, lower domestic consumption and higher exports – thanks Iraq. Shares that open in 2020/21 are somewhat lower on the basis of higher exports and lower imports. Production fell by more than 2 million (cwt = 45.36kg) and the yield was estimated at, 7,544 per acre, up from 7,600 in the previous estimate.
Rice imports fell by 1 million cwt to 38 million cwt due to container shortages and high freight rates in the global supply chain. Iraq trade increased long grain exports from 2 million cwt to 65 million cwt, but the drought in California reduced the average grain exports somewhat expected to 1 million cwt and increased it to 26 million.
Globally, the expectation is an increase in supply, slightly higher consumption, broader trading and an increase in end-of-stock stocks. India’s continued harvest and lower prices of major exporters such as Vietnam and Thailand are contributing to the increase in trade and stocks.
Weekly Exports / Sales Report Sales by Iraqi businesses increased by about 700%, while exports fell by 89% this week to 4,600 tonnes. This is not surprising.
In Asia, the market is upside down and prices are a little softer this week in Thailand, Vietnam and India. Covit-19 and container shortages limit India’s ability to load and export rice, so prices there are stable.
This is a similar story in Vietnam, where Covit-19 malfunctions make it difficult to load containers — even when they are available. All Thai, Vietnamese and Indian rice prices are joining the $ 380-385 MT range this week.
Domestically, the harvest is approaching half in Texas, while Louisiana has already harvested at least 35%. Yields continue to be optimistic in Arkansas, where harvesting has not yet begun, and may offset below-average yields so far in Louisiana and Texas.
While it is exciting to discuss the new crop, the “hangover” of products from the previous crop is overweight in the market — especially when domestic purchases are kept to a minimum due to Govt-19 restricted school lunch programs. Like Arkansas, Mississippi will not begin to harvest until the end of August, but expectations will be somewhat average compared to the upbeat tone coming from Arkansas.
Futures stock was relatively quiet, with open interest just 0.4% below 7,679. The average daily dose was 492, down 32% from last week. The required letter of credit indicates the future of the hope that the 40,000 metric tons of Iraq contracts will renew the balance, but with caution before violating the absolute commitment.
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