The U.S. cash market is slowing down as farmers are occupied with planting. With positions well covered, few U.S. exporters are actively seeking to make new purchases. Rice millers in Mexico and Central America are well stocked with forward purchases made until the end of June.
On Monday, April 30, the USDA reported that the 2001 U.S. rice crop is 67% planted, compared to an average 51% during the past five years. The U.S. rice crop is emerging 18% ahead of the five-year average at 42%.
On the global markets, Vietnamese rice prices have pushed slightly higher on relatively heavy sales. Vietnamese farmers are now under less pressure to sell with the completion of the winter-spring harvest. Buying for existing contracts with the Philippines, Cuba and Iraq are helping prices, as is interest from buyers in both West and East Africa. Vietnam plans to hold sales talks with Iran in May. Vietnamese exporters are also negotiating sales in North Korea, South Korea and Africa.
Thai rice prices have remained stable this week, supported by moderate shipments of previously concluded sales to the Philippines, Nigeria and Colombia. Traders in Thailand are also hoping for large sales to Iran when a delegation from that country visits within the next few weeks. Although little new business has materialized, Thai officials have been active in the pursuit of new business. Thai exports for the year have now surpassed 2000 totals by nearly 40,000 tons at 1.93 million tons between January 1 and May 1.
Among other negotiations, Thai and Malaysian officials have discussed setting up a barter agreement where Malaysia would supply Thailand with crude oil, and Thailand would supply Malaysia with rice. If realized, this would be the first time Thailand has reached a barter trade agreement with its southern neighbor.
In separate talks on the weekend of April 28-29, Thai officials expected to make a sale for up to 500,000 tons of rice to North Korea. The two countries failed to reach agreement, however, and canceled the signing of a memorandum of understanding (MOU) scheduled for Monday April 30. The two countries could not agree to a plan for North Korean repayment of existing debt from purchases in the 1990s or to credit terms for a new agreement. Talks between the two countries are scheduled to continue.
The Philippine National Food Authority (NFA) has now completed purchases for imports of 650,000 tons of rice this year. According to NFA officials, additional imports are contingent on this month’s survey of domestic production.
Responding to the requests of Pakistani officials, the NFA plans to send a delegation to Pakistan to inspect the country's rice mills and export houses. Pakistan is looking to convince the NFA that rice processing in the country will meet quality standards.
Despite slow demand for Pakistani rice, prices remain firm as millers hold back what is an increasingly limited supply in the country. Some traders estimate that only around 100,000-200,000 tons are available for export before new crop supplies enter the market in October. Farmers and traders in the country continue to monitor a prolonged drought that could delay planting and harvest and hurt production. Planting for the new crop will begin in May.
The Indian government has decided to allow the Food Corporation of India (FCI) to export 3 million tons of rice from its stockpiles at prices as low as 5,650 rupees ($120.67) per ton from previous levels set at approximately $145 per ton. Local exporters feel that India has a chance at entering the global export market if they keep prices around that rate.
Many traders from competing exporting countries believe that India will not be competitive, even at these prices, due to deflated global prices. These traders indicate that most buyers will continue to buy rice from Vietnam and Thailand. India currently holds over 23 million tons of rice in its stockpiles, more than 11 million tons above the amount they need to maintain buffer stocks.
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