Miller Magazine Issue: 126 June 2020

48 NEWS MILLER / JUNE 2020 Rice prices remain high on constrained supplies and robust demand Since the beginning of 2020, export quotes have ri- sen sharply by 15 to 30 percent for most exporters, initially elevating when export restrictions were imple- mented. Despite the reversal of most of these policies, prices have remained high throughout May and June for most exporters due to market concerns about tight supplies and strong demand, USDA says in its monthly report released on 12th June. Remarkably, Indian quotes have been largely un- moved over the past few months as burdensome supplies weigh on its market. However, India’s con- tinued lock-down amid the pandemic is constraining exports even at those prices and supporting the hig- her quotes of other exporters. On the demand side, global consumption is rising in 2019/20. Import de- mand has remained strong, especially with the Phi- lippines, the largest importer, actively tendering for sizeable quantities. In addition, tight supplies are supporting the hi- gher prices. Overall, global production has fallen in 2019/20, notably in Southeast Asia and the United States. A drought in Thailand has buoyed prices with exports now forecast to slide to the lowest volume in 7 years. Similarly, in the United States, a smaller 2019/20 crop is expected to result in the very low stocks. Ex- ceptionally high futures prices for nearby delivery and record U.S. imports in April are further evidence of the tight situation. In the medium-term, more abundant global supp- lies are expected to alleviate some pressure. The South American 2019/20 harvest is nearly over, thus improving the Western Hemisphere supply situation. The 2020/21 global production is forecast at a re- cord. U.S. production is forecast to recover with har- vest beginning next month. Thai production is also expected to rebound in 2020/21, with harvest to be- gin in late 2020. The largest exporter, India, is also projected to have another bumper crop; however, its ability to move sizable quantities of rice into the glo- bal market will have a direct impact on the relative price levels.