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Rice Supply in World Market - PDF

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					Rice Market Situation
 16 December 2008
          World supply & demand remains
             tight despite better crops
• Global rice prices remain high on a historic basis
• Sterling decline since July boosting import prices
• World stocks remain at relatively low level.
• Political uncertainty remains a factor – unrest in
  Thailand; export restrictions retained in India and
  Egypt - all important suppliers to EU market.
• Basmati crop much reduced due to disease,
  especially in India. Consequently market remains
  far above 2007 levels. Strong demand from Middle
  East.
                                                World rice supply up, but
                                                stocks still relatively low
                                                                                           (source USDA)

                              450                                                                                                          40%
                              425
Production (million tonnes)




                                                                                                                                           35%
                              400
                                                                                                                                           30%




                                                                                                                                                 Percentage
                              375
                                                                                                                                           25%
                              350
                              325                                                                                                          20%

                              300                                                                                                          15%




                                                                                                                                  2008/9
                                    1999/2000




                                                                                                    2005/06

                                                                                                              2006/07

                                                                                                                        2007/08
                                                2000/01

                                                          2001/02

                                                                    2002/03

                                                                               2003/04

                                                                                          2004/05



                                                                              Year

                                                          Production                     Stocks/Use ratio
       Export supplies still restricted due to
       food security and political concerns

• India’s restrictions on exports of non-
  basmati are set to remain until May
  2009. Minimum export price of $1000
  set for basmati, also subject to an export
  tax of $175 per tonne.
• Export restrictions also remain in place
  for Egypt; USA shipments to EU still
  much reduced due to concern about GM
  rice.
          Prices remain close to 30
                  year high
• World rough rice index (compiled by USDA)
  remains 100% higher than at the end of 2007
• Thai rice quotations (delivered EU) have fallen
  from peak levels but are still nearly double
  historic levels.
• Price of EU produced rice (Spain and Italy)
  also remains very high at 50% above autumn
  2007 levels.
• Chicago rice futures still up 80% year on year,
  despite retreat from peak level
                  Global rough rice index soars
                              (source USDA)




      17.5
      15.5
      13.5
$ per cwt




       11.5
            9.5
            7.5
            5.5
        Chicago rice futures retreat, but
        remain at historically high level
                           (Source CBOT)




25

20

15
                                                     $/cwt
10

    5

    0
02


        03


             04


                  05


                       06


                                   07


                                           08


                                                09
J


        J


             J


                  J


                       J


                                  J


                                           J


                                                J
                       FOB rice quotations have
                      retreated from peak levels...
                                                                                            (source USDA)


1200
1000
 800
 600                                                                                                                                                         US long grain
 400                                                                                                                                                         Thai grade B
 200                                                                                                                                                         Viet 5%
   0
       2006-08
                 2006-10
                           2006-12
                                     2007-02
                                               2007-04
                                                         2007-06
                                                                   2007-08
                                                                             2007-10
                                                                                       2007-12
                                                                                                 2008-02
                                                                                                           2008-04
                                                                                                                     2008-06
                                                                                                                               2008-08
                                                                                                                                         2008-10
                                                                                                                                                   2008-12
          ….Although annual average
               remains high
                        (Price index: 2001/2 = 100; source USDA)

445
395
345
                                                                      USA
295
                                                                      Thailand
245                                                                   Vietnam
195
145
95
      3


              4


                       5


                                 6


                                            7


                                                       8


                                                                  t
                                                                en
      /


               /


                        /


                                 /


                                            /


                                                       /
   02


            03


                     04


                              05


                                         06


                                                    07

                                                              rr
 20


          20


                   20


                            20


                                       20


                                                  20

                                                            cu
                                         200
                                               400
                                                     600
                                                           800
                                                                 1000
                                                                        1200
                                                                               1400




                                     0
                            Jan-04
                            Mar-04
                            May-04
                            Jul-04
                            Sep-04
                            Nov-04
                            Jan-05
                            Mar-05




Thai cargo parboiled - 10
                            May-05
                            Jul-05
                            Sep-05
                            Nov-05
                            Jan-06
                            Mar-06
                            May-06
                            Jul-06
                            Sep-06
                            Nov-06




Thai cargo scented - 7
                            Jan-07
                            Mar-07
                            May-07
                            Jul-07
                            Sep-07
                            Nov-07
                            Jan-08
                            Mar-08
                            May-08
                            Jul-08
Thai cargo longgrain -




                            Sep-08
                            Nov-08
                                                                                       Thai rice prices delivered to EU
                                                                                      remain well above long term base
                               Euro per tonne




             150
                   200
                         250
                               300
                                        350
                                                400
                                                      450
                                                            500
                                                                  550
19/10/2004

19/01/2005

19/04/2005

19/07/2005

19/10/2005

19/01/2006

19/04/2006

19/07/2006

19/10/2006

19/01/2007

19/04/2007

19/07/2007

19/10/2007

19/01/2008

19/04/2008
                                                                        (source: EU Commission)




19/07/2008

19/10/2008
                                                                                                    prices remain very firm



                                            Ariete
                                            Selenio
                                                                                                  Italian and Spanish paddy




                               Sp Indica
                               Thaibonnet
                     Other factors

• Dramatic fall in currency increases costs in sterling
• State buying agencies in Thailand, India and other
  rice producing countries looking to increase stocks
  to guard against future supply shocks; also to
  support prices.
• EU access to USA supplies remains restricted by
  concerns about possible low level GMO presence.
  Imports from US running at 15% of 2006 level
• Although prices quoted, grain not always available
   Sterling declines steeply -
boosting cost of imports and tariffs

                • Down 25% against
                  US dollar

                • Down 15% against
                  euro

                • Down 20% against
                  Indian rupee
           Basmati market follows
               similar trend
• New crop prices similar to 2007, and 50-80%
  higher than 2006 equivalent
• Strong demand from Middle East means firm
  prices likely to be maintained
• In EU, absence of USA rice due to exclusion from
  EU market in 2006/7 has increased demand for
  basmati
• Indian government has set a minimum export price
  of $1000 per tonne, and imposed an export tax of
  approx $175 per tonne since April 2008
• Intervention buying of up to 500,000 tonnes by
  Pakistani government is delaying sales and
  pushing up export prices
                     2008 Basmati auction prices open
                      similar to 2007, well above 2006
Pusa Basmati Paddy Prices                                                                         Traditional Basmati Paddy Prices
                                                                                                                                      2006                   2007                   2008
                             2006               2007               2008
25000                                                                                             32,000
                                                                                                  31,000
24000
                                                                                                  30,000
23000                                                                                             29,000
22000                                                                                             28,000
21000                                                                                             27,000
                                                                                                  26,000
20000
                                                                                                  25,000
19000                                                                                             24,000
18000                                                                                             23,000
17000                                                                                             22,000
                                                                                                  21,000
16000
                                                                                                  20,000
15000                                                                                             19,000
14000                                                                                             18,000
13000                                                                                             17,000
                                                                                                  16,000
12000
                                                                                                  15,000
11000                                                                                             14,000
10000                                                                                             13,000
 9000                                                                                             12,000




                                                                                                                                                                                                               03-Jan
                                                                                                                                                                                                                        10-Jan
                                                                                                           18-Oct
                                                                                                                    25-Oct
                                                                                                                             01-Nov




                                                                                                                                                                           06-Dec
                                                                                                                                       08-Nov
                                                                                                                                                15-Nov
                                                                                                                                                         22-Nov
                                                                                                                                                                  29-Nov


                                                                                                                                                                                    13-Dec
                                                                                                                                                                                             20-Dec
                                                                                                                                                                                                      27-Dec
        01-Sep

                 15-Sep

                          29-Sep




                                                                                         05-Jan
                                   13-Oct

                                            27-Oct

                                                     10-Nov

                                                              24-Nov

                                                                       08-Dec

                                                                                22-Dec
              Basmati market drivers

• Farmers require a higher price to compensate for
  lower yield of basmati rice – especially traditional
  varieties
• Crop problems further restrict supplies; neck blight has
  reduced 2008 yield by an estimated 30%.
• Growing demand within India as economic growth
  takes hold
• Long maturation period means purchases made up to
  a year before marketing
• Strong export demand from the Middle East and
  United States including for Pusa 1121 which is not
  classified as basmati in EU

				
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