6/23/2016

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9th Session of the AMIS Global Food Market Information Group

GLOBAL RICE MARKET SITUATION AND OUTLOOK FOR 2016/17

NINTH SESSION OF THE AMIS GLOBAL FOOD MARKET INFORMATION GROUP

FAO, Rome

22-23 June 2016

9th Session of the AMIS Global Food Market Information Group

GLOBAL PRODUCTION TO RECOVER IN 2016

2

After two successive seasons of no or negative production growth, global paddy production to recover by 1 percent in 2016. Improved weather conditions to boost plantings in Asia, where these had been depressed by unseasonable dryness in 2014 and 2015.

-2

-1

0

1

2

3

4

5

6

500

550

600

650

700

750

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Paddy production Annual growth rate

Million tonnes Percent

f'cast.

3.5

3.8

4.1

4.4

4.7

5.0

145

150

155

160

165

2000 2002 2004 2006 2008 2010 2012 2014 2016

Area Yields

Million hectares Tonnes per hectare

f'cast.

6/23/2016

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9th Session of the AMIS Global Food Market Information Group

EL NIÑO DISSIPATES - LA NIÑA LIKELY TO FOLLOW

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El Niño neutral conditions return in time for main-crop plantings in northern hemisphere Asia. The likely la Niña event could provide a further boost to rains over the region later in the year.

NOAA Climate Prediction Center: Weekly ENSO Evolution, Status and Prediction Presentation, 13 June 2016.

NOAA Climate.gov

9th Session of the AMIS Global Food Market Information Group

PRODUCTION IN THE MAJOR PLAYERS

4

Prospects generally favourable for northern hemisphere countries, less so for the southern hemisphere.

2014 2015 2016 F 2016/2015

Change

million tonnes, milled eq. %

World 494.4 490.1 494.4 0.9

China (Mainland) 141.5 142.7 143.4 0.5

India 105.5 103.4 105.6 2.2

Indonesia 44.4 45.8 45.1 -1.5

Bangladesh 34.5 35.0 34.8 -0.4

Viet Nam 29.2 29.4 28.9 -1.6

Thailand 22.0 19.0 20.1 5.6

Myanmar 16.9 16.5 16.8 1.9

Philippines 12.4 11.7 12.2 4.4

Brazil 8.2 8.5 7.5 -11.6

Japan 7.8 7.6 7.7 1.2

United States 7.1 6.1 7.3 20.1

Pakistan 7.0 6.6 6.6 0.0

Countries ranked according to their position in 2014-2016 average production. F=forecast

6/23/2016

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9th Session of the AMIS Global Food Market Information Group

RETURN TO EL NIÑO NEUTRAL CONDITIONS TOO LATE FOR SOME

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Where the 2016 season is more advanced, main-crops were hindered by untimely rains, unseasonable temperatures or water shortages, under peaking El Niño conditions.

Mekong Delta Saltwater Intrusion Map

Affected area > 4g/l

: Affected area > 4g/l, but fresh water fetched at low tide possible

Possibly affected with 4g/l

Central Committee for Natural Disasters Prevention and Control, March 2016.

-50

0

50

100

Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16

Corrientes - Argentina Rio Grande Do Sul - Brazil

-100

-50

0

50

100Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16

Rainfall departure from LPA (MM)

Kien Giang - Viet Nam West Java - Indonesia

9th Session of the AMIS Global Food Market Information Group

FAO-AMIS-USDA-IGC Balances

6

General agreement on production upturn, but the extent of the forecast recovery also influenced by the treatment of southern hemisphere producing countries.

FAO-AMIS

RICE 2015/16 2016/17

(milled) est. f'cast

2-Jun

Production 490 494

Supply 664 663

Utilization 496 503

Trade 44.7 44.1

Stocks 169 164

USDA IGC

2015/16 2016/17 2015/16 2016/17

est. f'cast est. f'cast

10-May 26-May

470 481 473 486

585 587 584 587

478 481 483 488

41.4 40.7 42.2 41.8

106 107 101 99

Production: For FAO-AMIS, rice production data refer to the first year of the marketing season shown (e.g. 2016 production is allocated to the 2016/17 marketing season). By contrast, for rice and maize, USDA and IGC aggregate production of the northern hemisphere of the first year (e.g. 2016) with production of the southern hemisphere of the second year (2017 production) in the corresponding 2016/17 global marketing season.

6/23/2016

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9th Session of the AMIS Global Food Market Information Group

INTERNATIONAL TRADE IN RICE

7

Volumes traded across the globe to remain large in 2016 and 2017, but unlikely to match heights seen in 2014. A combination of tighter exportable availabilities and improved harvests in major importing countries to check growth.

0

50

100

150

200

250

300

-

5

10

15

20

25

30

35

40

45

50

2007 2008 2009 2010 2011 2012 2013 2014 20152016*2017

Exports FAO Rice Price Index

World rice trade and FAO Rice Price Index

* Jan.-May 2016 average for prices

Million tonnes, milled eq. 2002-2004=100

f'cast

Some dominant market features:

Still a thin market

Strong government intervention

state trading

self-sufficiency agendas

Large informal flows

High level of segmentation

Concentration of exports

9th Session of the AMIS Global Food Market Information Group

DEMAND IN ASIA AND LATIN AMERICA TO UNDERPIN TRADE IN 2016

8

Rising needs due to El Niño related production shortfalls and the need to reconstitute inventories to keep imports by Asia and Latin America and the Caribbean at above average levels in 2016.

2015 2016 F 2017 F 2017/2016

Change

million tonnes, milled eq. %

World 44.5 44.7 44.1 -1.4

China (mainland) 6.6 6.3 6.0 -4.8

Nigeria 2.2 2.5 2.7 8.0

EU 1.8 1.9 1.9 1.6

Philippines 2.0 2.0 1.5 -25.0

Saudi Arabia 1.5 1.6 1.5 -2.6

Indonesia 1.3 1.8 1.0 -44.4

Côte d’Ivoire 1.3 1.2 1.3 9.7

Senegal 1.3 1.1 1.1 4.8

Malaysia 1.1 1.2 1.1 -8.3

Iraq 1.0 1.2 1.3 9.6

Iran, Islam. Rep of 0.8 1.2 1.2 4.3

Others 23.6 23.0 23.5 2.4

Countries ranked according to their position in 2015-2017 average imports. F=forecast

0

4

8

12

16

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Africa

Far East

Others

Latin America & C.

Near East Asia

f'cast

Million tonnes, milled eq.

6/23/2016

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9th Session of the AMIS Global Food Market Information Group

BUT MORE RESTRICTIVE POLICIES AND MACRO-ECONOMIC FACTORS CAP TRADE GROWTH

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-

50

100

150

200

250

300

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2010 2011 2012 2013 2014 2015 2016

China (Mainland): Imports

Imports

Price differential HunanIndica and Viet Nam 25%

Million tonnes, milled eq. USD/tonne

of which informal

f'cast

0.0

1.0

2.0

3.0

4.0

2010 2011 2012 2013 2014 2015 2016

Nigeria: Imports

ImportsMillion tonnes, milled eq.

f'cast

of which across land borders

9th Session of the AMIS Global Food Market Information Group

ON THE EXPORT SIDE...

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Successive poor harvests to cost India its leading role amongst world rice exporters. In Thailand, supply releases from Government stockpiles to cushion production shortfalls and sustain exports.

2015 2016 F 2017 F 2017/2016

Change

million tonnes, milled eq. %

World 44.5 44.7 44.1 -1.4

Thailand 9.8 9.9 10.2 3.0

India 11.1 10.0 8.5 -15.0

Viet Nam 8.4 8.7 8.8 1.1

Pakistan 4.1 4.4 4.4 0.0

United States 3.5 3.3 3.6 8.3

Myanmar 1.6 1.7 1.7 1.2

Cambodia 1.2 1.4 1.4 0.0

Brazil 0.9 0.8 0.9 6.8

Uruguay 0.7 0.9 1.0 5.6

Guyana 0.5 0.5 0.5 2.0

Others 2.7 3.2 3.3 1.5

Countries ranked according to their position in 2015-2017 average exports. F=forecast

0

5

10

15

20

25

30

2013 2014 2015 2016 2017

India

Thailand

Viet Nam

United States

Pakistan

Percent

Major rice exporters' shares in global trade

f'cast

6/23/2016

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9th Session of the AMIS Global Food Market Information Group

GLOBAL UTILIZATION TO OUTPACE PRODUCTION

11

Sustained by greater food demand, global rice utilization to outpace production in 2016/17 leading to a second successive year of global inventory declines.

375

405

435

465

495

525

20

60

100

140

180

220

2006/07 2008/09 2010/11 2012/13 2014/15 2016/17

Stocks (left axis)

Production (right axis)

Utilization (right axis)

Million tonnes, milled eq. Million tonnes, milled eq.

f'cast

2015-16 est.

2016-17 f'cast

Change: 2016-17/ 2015-16

million tonnes, milled eq. %

WORLD BALANCE

Production 494.4 490.1 494.4 0.9

Trade 44.5 44.7 44.1 -1.4

Utilization 491.5 496.4 502.6 1.3

Food 395.2 399.7 404.7 1.3

Feed 17.8 17.9 18.1 0.7

Other uses 78.5 78.8 79.8 1.3

Ending stocks 173.9 168.9 163.8 -3.0

9th Session of the AMIS Global Food Market Information Group

INDIA AND THAILAND TO DRIVE STOCK DRAW-DOWN

12

Efforts to dispose of large public reserves to cut inventories in Thailand and India, offsetting continued buildups in China (Mainland), due to successive large harvests and sizeable imports.

0

6

12

18

24

30

0

11

22

33

44

55

2006/07 2008/09 2010/11 2012/13 2014/15 2016/17

Pakistan United StatesViet Nam ThailandIndia Stocks-to-disappearance Ratio

Million tonnes, milled eq. Percent

Stocks held by the major rice exporters and stocks-to-disappearance ratio

f'cast

0

8

16

24

32

40

0

40

80

120

160

200

2006/07 2008/09 2010/11 2012/13 2014/15 2016/17

Rest of the world Major rice exportersChina, Mainland World stocks-to-use-ratio

Million tonnes, milled eq. Percent

Global closing stocks and Stocks-to-use ratio

f'cast

6/23/2016

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9th Session of the AMIS Global Food Market Information Group

INTERNATIONAL RICE PRICES

13

In the Indica segment, a two year downward tendency is reversed amid prospects of tighter availabilities. Although less pronounced, gains also concern Aromatic rice.

500

650

800

950

1,100

1,250

1,400

Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16

Pak Basmati India BasmatiThai Fragrant US N.1/4 MG

US$/tonne

Aromatica and Japonica Prices

250

300

350

400

450

500

550

600

Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16

US 2/4% Thai 100% B Pak Irri 10%

Viet 5% India IR 5%

US$/tonne

High Quality Indica Prices

9th Session of the AMIS Global Food Market Information Group

UNCERTAINTIES IN THE SHORT TERM

14

Weather La Niña and its potential influence over monsoon rains in Asia

Policies In major exporters, particularly those concerning the release of public stocks in

Thailand and India

In major importing countries like China (Mainland), Indonesia, Nigeria and the Philippines

Macro-economic factors currency exchange rates

energy prices, etc.

Developments in other cereal markets

6/23/2016

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9th Session of the AMIS Global Food Market Information Group 15

Thank You