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It has been a long time since we’ve had something to look forward to, and this week we have two big opportunities before us. The first is the result of the Colombia TRQ tender, the largest of recent tenders at 144,000 MT. The tender was held on January 26th, and with results not formally announced, we understand the full amount was awarded.
The second wild card is Venezuela. There is no way to speak with certainty on the timeline or the language of an agreement, but there is an expectation that the U.S. will claw back some of its market share taken by Brazil in recent years. Venezuela is largely dependent on food imports, and with the U.S. now taking a larger role in the government, working rice imports into any future plans is gaining traction. However, U.S. milling yields and the cooking quality remain an obstacle as Venezuela has been entirely a market for rough rice.
These two opportunities breathe welcome life back into the rice market, where price is still in the doldrums and producers are actively looking to cut rice acres for the coming year’s crop. A smaller supply, steady business to Haiti and Iraq, along with potential sales to Colombia and Venezuela do provide price support, something that has been lacking since the free-fall began over a year ago.
Milled prices are still registering at $575 pmt, and there is potential we have found the bottom here. Except for Brazil, Mercosur has reduced inventories of rice and are focused on the beginnings of the new crop harvest. The U.S. has an ample supply at the moment. Prices from East Asia and the Middle East are still problematic though, as India is showing prices at $360 pmt and Vietnam at $365 pmt. Surprisingly, Thailand jumped up to $395 pmt this week but is weighted down by its Indian and Viet counterparts.
Prices on the ground haven’t changed, as Texas is registering at $9.55/cwt and Louisiana at $10/cwt. Mississippi, Arkansas, and Missouri are all at $9.50/cwt. Prices like these are leading to the lowest expected acreage of any rice crop since the early 1980’s.
The weekly USDA Export Sales report shows net sales of 59,600 MT for this week, down 5% from the previous week, but up 48% from the prior four-week average. Increases were primarily for Haiti (20,600 MT, including decreases of 400 MT), Mexico (18,600 MT), Japan (13,700 MT), El Salvador (4,500 MT), and Canada (1,100 MT). Exports of 82,800 MT were up 35% from the previous week and 86% from the prior four-week average. The destinations were primarily to Iraq (44,000 MT), Haiti (28,300 MT), Mexico (4,400 MT), Taiwan (1,900 MT), and Japan (1,600 MT).
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