U.S. Rice Sale To Iraq Brings Relief
US RICE PRODUCERS
KATY, TEXAS
This week's biggest news is Iraq’s purchase of 88,000 metric tons of U.S. long grain. This is excellent news; the MOU calls for 200,000 metric tons per year, but this acquisition now brings sales up to 220,000 metric tons. If you recall, there were problems with transactions due to banking/currency issues last year, so in effect, Iraq is helping to make up the shortfall from the previous year’s deficit. The Creed Report indicates prices at $675pmt bulk FOB vessel NOLA, and we agree that this was a needed purchase to clean up old crop supplies.
Prices on the ground remain soft in the month of February. Texas remains at $14.70/cwt and Louisiana at $14.50-$14.80. But Arkansas, Mississippi, and Missouri have all been at $13/cwt since the start of the month, and there hasn’t been much movement. The February FAO report (next paragraph) doesn’t offer much hope either from a global perspective. The bright spot is truly the Iraq purchase for any cash sellers looking for demand in the spot market in the near term, as paddy exports have been difficult with the quality of this year’s crop not being preferred by most buyers.
The Mercosur harvest continues in the early stages where the crop continues to be reported in good condition. Brazilian farmers looking for a “break-even” price from mills and exporters. FOB paddy prices for what little business has been completed are reported to be in a range of $330-$350 per ton depending on the specific loading port. A few sales to Central America, Mexico, and Venezuela have been confirmed.
The FAO All Rice Price Index from February dropped to 113.6 points in January, falling 4.7% from December and 20.4% lower than last year. Indica rice saw the biggest drop, down 5.4% to a 25-month low due to weak demand on top of huge supplies. Aromatic & Glutinous rice also declined, down 4.0% and 1.8%, respectively. Japonica rice, however, increased by 3.0%, driven by tight supplies in Vietnam and Japanese import demand. The report further outlines that export prices for Indica rice fell across Asia and the Americas, with trade slowing due to Lunar New Year celebrations. Apart from Bangladesh, most buyers were inactive, including India, where demand slowed after heavy shipments in late 2024.
In Asia, the market is undeniably soft. It’s no surprise to any involved, but the pain is working down to the farmer levels in Thailand and Vietnam. If it’s India’s huge supplies or quiet demand centers, prices in Thailand are off 31% from this time last year, and off in Vietnam 35% from this time last year. The culprit: India, as they had an export ban at this time last year. In the Western Hemisphere, we can’t call the market “strong” at this point, but we can’t say it’s as soft as the Eastern Hemisphere either. Harvest has just begun in Uruguay and full swing in Argentina. Prices are reported at $630pmt and $595pmt respectively, while USA is at $680pmt.
Theweekly USDA Export Sales reportshows net sales of 183,100 MT this week, a marketing-year high, were up noticeably from the previous week and from the prior 4-week average. Increases were primarily on account of Iraq. Exports of 83,700 MT were up noticeably from the previous week and up 18% from the prior 4-week average. ∆
US RICE PRODUCERS