Page 38 - Food Outlook

ample level of 1.8 million tonnes, while purchases by the United States hold steady at 750 000 tonnes.
As for exports, although India and Thailand are predicted to remain the world’s leading suppliers of rice in 2018, both countries could see their ability to compete eroded by more limited exportable availabilities. In the case of India, a somewhat smaller 2017 crop is expected to result in a 4 percent year-on-year contraction in foreign sales to 10.7 million tonnes. As for Thailand, a 5 percent reduction in exports to 10.4 million tonnes would stem from the depletion of government inventories, which is likely to prevent the country from maintaining sales of lower-grade rice at the above-average levels sustained since 2014. Based on current prospects of reduced crops, Argentina, the United States and Uruguay are all forecast to see their rice exports reduced in 2018.
Meanwhile, the resumption of Chinese exports to Africa, which had essentially come to a stop over the 2012–2015 period, has been an emerging feature of
rice trade in recent months, along with Myanmar’s headway in diversifying its outlets thanks to competitive pricing. Given prospects of ample availabilities due to generally positive harvests, FAO anticipates these trends to continue in 2018, with shipments by China (Mainland) reaching an 11-year high of 1.2 million tonnes, and those of Myanmar striking a new record of 2.2 million tonnes. Provided no major production setback is incurred next year, Viet Nam is forecast to see increased demand from its traditional Asian markets. Combined with the approval of more lenient export terms for rice traders, this could sustain a 9 percent increase in 2018 deliveries by Viet Nam to 7.5 million tonnes. Export recoveries are also foreseen for Pakistan and Brazil next year, adding to expected increases in Australia, Cambodia, Guyana and Paraguay.
UTILIZATION
Per capita consumption to increase modestly
Global rice utilization is forecast to expand by 1.1 percent in 2017/18 to 503.2 million tonnes (milled basis). All of this growth would be sustained by greater food consumption, which is expected to reach 406.6 million tonnes,
1.4 percent more than in 2016/17. This would place
world per capita rice consumption at 53.8 kg, compared
to 53.7 kg a year earlier. The modest expansion mirrors expectations that somewhat tighter supplies would steady rice intake in Asia, while causing it to fall in North America. Consumption growth is predicted to be more upbeat in the other regions, especially in Africa, where demand for rice remains strong despite persistently high domestic prices in
eastern and southern parts of the continent. All non-food uses of rice are forecast to change little year-on-year. For instance, feed use is seen close to the 2016/17 level at
17.8 million tonnes. Although use of rice as animal feed is being sustained by the release of supplies from government granaries in Japan, the Republic of Korea and Thailand, more affordable feedstuffs are expected to displace rice
in most other countries, especially in Bangladesh, China (Mainland) and Viet Nam.
STOCKS
China to sustain a small expansion in global rice inventories
Despite expectations of stagnating production growth, world rice supplies are predicted to exceed utilization in 2017/18, giving rise to a small (0.4 percent) expansion in global rice inventories by the close of 2017/18 marketing years to 169.2 million tonnes (milled basis). This level would be sufficient to cover four months of projected global rice use, while keeping the world rice stock-to-use ratio at a comfortable level of 33.1 percent in 2017/18.
To a large extent, the forecast expansion in global rice inventories hinges on expectations of a 3 percent build- up in China (Mainland) to 102.2 million tonnes. Chinese rice reserves are gauged to have risen steadily since 2007/08, as high domestic prices encouraged successive large harvests and imports. The same factors are expected to be at play this season, although the stock buildup is likely to be moderated by a considerable pick-up in export activity and more success in finding a market for the
large supplies stored in government granaries. Among other rice importers, Bangladesh, Iraq, Nigeria and the Philippines are all similarly predicted to replenish their inventories. However, these gains are likely to be offset by stock reductions in the Republic of Korea, Madagascar, Sri Lanka and the United Republic of Tanzania, all linked to output shortfalls. A steep cut in the Republic of Korea would be further associated with ongoing government efforts to destine surplus production to the industrial and animal feed sectors.
Among net-exporting countries, sizeable state acquisitions are forecast to keep rice inventories in India broadly steady year-to-year, while bumper harvests should allow Brazil, Cambodia, Myanmar and Pakistan to add to their reserves. By contrast, rice stocks are seen ending lower in Argentina and Viet Nam, in view of expected drops in domestic production, and in Uruguay, due to the fast pace of exports. Still, the largest drawdown is forecast for Thailand, where reserves may contract by 2.1 million tonnes to stand at 6.0 million tonnes, as a
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FOOD OUTLOOK NOVEMBER 2017
Market assessments