USDA: Global 2007-08 Rice Production Seen Slightly Higher

Global rice production in 2007/08 is projected at 421 million tons (milled
basis), up fractionally, with larger crops forecasted for Pakistan, China,
Bangladesh and Thailand, the U.S. Department of Agriculture said Monday in its
monthly Rice: World Markets and Trade report posted on the Foreign Agricultural
Services Web site.
 
  Global consumption continues to outpace production and is expected to grow
5.5 million tons to 424 million. Consequently, ending stocks are expected to
continue their downward trajectory, dropping almost 4 million tons to 72
million. Although India is the main reason, stocks in the rest of the world are
also forecast to decline, albeit at a slower rate.
 
  Global trade is projected is virtually unchanged. Indonesia is expected to
drive world imports again as a result of strong demand and low stocks. In other
markets, less import demand from Bangladesh and Malaysia is offset by higher
imports by the Philippines, Brazil, and China.
 
  On the supplier side, India's exports are expected to be down as a result of
tighter supplies and high domestic food grain prices. Vietnam's exports are
also expected to be down. However, larger exports by Thailand, Egypt, Pakistan,
and Uruguay are supported by increased production and strong world prices. The
United States is expected to lose ground in export markets due to tight
supplies and reduced price competitiveness.
 
 
MONTHLY HIGHLIGHTS 2007 PRICES
 
  International: Thai 100B is currently quoted at $324 per ton, FOB, unchanged
from last month as good production offsets strong demand and a relatively
strong currency. Nominal prices in Vietnam are down $4 from last month. Viet 5%
is currently quoted at $300 per ton, FOB. Prices for India and Pakistan for
lower grades remain strong. In the case of India, strong demand, both
domestically and for export, have helped support prices.
 
  Domestic: U.S. prices continue to soften month to month, with U.S. #2/4 long
grain milled rice quoted at $412 per ton, FOB, down $5. The spread between
comparable qualities of Thai and U.S. rice continues to narrow and is now at
$88 per ton. Prices for U.S. #1/4 medium grain milled rice from California are
currently quoted at $525 per ton, FOB, down $10 from last month.