Rice Market Update: Uncertainties Continues to Grow
Published on: March 19, 2022.
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As has been the case for several weeks now, the cash market throughout most of the delta was a bit stagnant this week, showing little signs of activity. It seems that most growers are more preoccupied with planting than marketing as the global grain complex becomes increasingly unstable.
It seems clear that Putin severely underestimated the resolve of the Ukrainian people. Unfortunately, as a result, violence continues to escalate, and global grain security continues to deteriorate. Knowing input costs are soaring, and that they’ll probably continue to do so, growers around the world are forced to consider or even reconsider what and how to plant.
In Asia, rice prices jumped a couple of weeks ago with all the other grains, further reflecting the global inflation at hand. However, since then, prices appear to have stabilized, at least in Thailand and Vietnam. Meanwhile, Pakistan is undergoing a small price correction as demand for whole kernel thins. Fortunately, the slowing of head rice demand is being partially offset by the growing needs for brokens in China.
The US rice industry is just two weeks away from the USDA publishing its initial acre projections. Although the USDA is expected to overestimate California’s acreage, the agency should call for lower rice acres throughout the delta if their view is in line with the industry’s.
According to the latest exports sales data, US rice sales have averaged roughly 68,000 MT/week over the past month, up from 42,000 in the four weeks prior. It will be interesting to see how US rice exports react to El Salvador’s new policy regarding the suspension of rice tariffs for a year.
The El Salvadorian government suspended tariffs on multiple products in an attempt stifle the dangerous rate of inflation the country is currently experiencing (6.7%). Keep in mind that this policy is not US specific and may result in more non-US rice entering the market, not to mention, the fact that other Central American countries struggling with a similar battle may consider the same action.
Source: https://agfax.com/2022/03/18/rice-market-update-uncertainties-continues-to-grow/
