Grain: World Markets and Trade, July 2003

Grain: World Markets and Trade
Foreign Agricultural Service Circular Series
FG 07-03
July 2003

Graph of World Rice Trade by Exporter in million metric tons

Grahic chart of United States Exports stock to use ratio for Rice

The forecast for 2004 global rice trade is 25.9 million tons, down approximately 1.0 million tons, or nearly 4 percent from a year earlier, based on reduced exportable supplies mostly in the United States, but also India and Burma. Global consumption continues to outpace production thereby causing further reduction in stocks and continued strong import demand.

The U.S. rice supply and demand situation has changed radically since July 2002. Over the past year, rice supplies tightened on unexpected strong demand from Latin America, specifically Venezuela and Brazil, and food aid donations to Iraq. U.S. prices have responded to the subsequent drastic reduction in stocks by surging about $85 since last July. With smaller stocks and less production forecast for 2003/04, the market premium between U.S. and global prices is expected to widen. Consequently, U.S. exports are forecast to drop about 30 percent from 3.7 million tons in 2003 to 2.7 million in 2004. This reduction is expected to be in milled rice exports (commercial and concessional). The United States will likely continue to fulfill rough rice demand to its traditional Western Hemisphere markets, as it is the only major supplier.