Jun 15, 2020
WASHINGTON, DC – Just a month ago, 2020 rice trade was all-but-guaranteed to be turned upside down following the impact of COVID-19 on shipping and the chaotic procurement of staple commodities. However, the June edition of the U.S. Department of Agriculture’s (USDA) World Agricultural Supply & Demand Estimates (WASDE) Report only shows modest changes to the balance sheet looking at logistical delays in China early in the year and ongoing shipping delays in India.
USDA revised down 2019/20 U.S. rice exports as the marketing year closes out next month. The roughly 60,000 MT reduction in exports can be attributed to the tight supply and elevated long grain prices that have reduced shipments to Central America and Mexico. USDA still expects 2019/20 to reflect a slight increase in export sales over the 2018/19 marketing year.
Global trade in 2020 is forecast down this month, almost exclusively due to the short supply in Thailand and uncompetitive, elevated pricing. With the end of Viet Nam’s export ban, they have moved to quickly backfill Thai markets, drawing down the country’s stocks. In addition to revisions for the 2019/20 marketing year, USDA highlighted the larger U.S. and global rice production projected for the 2020 crop. While 2020/21 is projected to bring another increase in exports, that figure was revised slightly down in this month’s WASDE due to spillover of elevated U.S. long grain pricing. Global trade in 2021 is expected to be reduced with decreasing COVID-19-related demand and production surges in the U.S., Thailand, and Brazil.
Trade negotiations with the United Kingdom, Kenya, and Japan could all present potential increases for U.S. rice exports through market growth.
“We are optimistic seeing USDA’s projections for increased exports next year, but we hope to drive those figures up through our investments in international marketing and promotion efforts in Asia, Europe, the Middle East, and throughout the Western Hemisphere,” said Sarah Moran, USA Rice vice president international.
Moran added: “USA Rice has a strong global footprint that allows us to share the advantages of using U.S.-grown rice, and additionally, having a larger 2020 crop will allow our exporters to be more competitive and increase our opportunities to expand and develop new markets.”
While the U.S. had a relatively small 2019 rice crop, USDA still anticipates that total exports will keep the U.S. in fifth place for global exports for both the 2019/20 and 2020/21 marketing years behind India, Thailand, Viet Nam, and Pakistan.