Rice Markets of the America’s: An Analyst Vie · Rice Markets of the America’s: An Analyst View Patricio Méndez del Villar Centre de Coopération Internationale en Recherche

Patricio Méndez del Villar - Cirad 1

Rice Markets of the America’s: An Analyst View

Patricio Patricio MéndezMéndez del Villardel VillarCentre de Coopération Internationale en Centre de Coopération Internationale en

Recherche Agronomique pour le Recherche Agronomique pour le Développement (Cirad)Développement (Cirad)

Rice Congress of the Americas 2007Cancun – Mexico16-17 May 2007


Plan of the presentation1. Main features of world rice trade2. Feature and Trends of the Americas

rice economy3. Constraints and opportunity for rice

production expansion4. Few considerations on prevailing

issues for long term prospects


Rice worldwide demand and supply

A relatively small market (less of 30 millions tons) ; wheat (115Mt) ; corn (90Mt)

Smaller share of global rice production is traded (about 7%) ; wheat (19%) ; corn (13%)

Global rice consumption & export is highly concentrated in Asia (88% of consumption & 77% of exports)

Annual growth 3,4% (1961-2005)


Trends in rice trade and stock volume

0

5000

10000

15000

20000

25000

30000

35000

1960 1965 1970 1975 1980 1985 1990 1995 2000 20050%

5%

10%

15%

20%

25%

30%

35%

40%

export/ total consumption in % End of year stock / consumption Export (Mt)

source: based on USDA -data


Rice world supply and demand distribution

Production

Consumption Sources: based on FAO & USDA -data Average 2005-2007

P 9,5MT

P 2,5MT

P 23,0MT

P 6,5MT

P 15,0MT

P 1,0MT

P 375MTP 200MT

P 3,5MTP 4,5MT

C 6,5MT

C 5,5MT

C 22,0MT

C 25,5MT

C 5,5MT

C 6,5MTC 11,0MT

C 192MT C 365MT

C 1,0MT

+3,0MT

+10MT

+8MT

+1MT

-3MT

-10,5MT

+1MT

-3MT-6,5MT

57%

30%

1%

2.5%

4%

3.5%

1%

1%


Rice production represent 5% of worldwide productionRice imports: nearly 15% worldwide trade

Central America & Caribbean: main importers, more of 50% of total demand for the area ; all countries are rice importers ; recent years, rice imports have exceed 2 MT annually (3MT paddy rice)South America: 25 – 30% total demand for the areaNorth America: 20 – 25% total demand for the area

Rice exports: nearly 20% worldwide trade

Rice Outlook in the Americas


Rice Export in the Americas

Rice exports: nearly 20% worldwide trade

North America: 12% worldwide exports ; share of the world market for rice has generally dropped since the mid-1970s (emergence of India and Vietnam as worldwide exporters)South America: 5% worldwide exports ; share of the world market for ricebetween 5 - 8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05

North America

South America

Share of the World Market of Rice

US Share : more 29% in 1975 ; less 10% in 2001


Rice Producers in the Americas

Rice is cultivated in almost every countries, except Canada.Brazil, USA, Colombia, Peru, Ecuador & Uruguay are the larger producersArgentina, Venezuela, Cuba, Dominican Rep. & Guyana are other important rice producing countries Small producing countries are in Central America, Haiti, Bolivia, Chile, Paraguay & Suriname

9,5 Mt

12,5 Mt

2,4 Mt1,4 Mt

2,1 Mt

1,1 Mt

0,9 Mt

0,8 Mt

0,5 Mt0,6 Mt

0,45 Mt

0,27 Mt

0,4 Mt


Rice Consumers in the AmericasHigh rice consumers (kg/cap): + 35 kg.

Cuba (72 kg); Costa Rica (53 kg); Panama (60 kg); Dominican Rep (50 kg) Ecuador (47 kg); Haiti (47 kg); Peru (45 kg) ; Brazil (43 kg)

Middle high: 20 to 33 kg. Colombia (33 kg) ; Nicaragua (30 kg) ; Guyana (23 kg); Suriname (25 kg) ; Uruguay (22 kg)

Middle low : ~ 20 kgVenezuela (19 kg) ; Bolivia (20 kg) ; Honduras (18 kg)

Low consumers : - 12 kg.Chile (12 kg.), Canada (10 kg); El Salvador (10 kg); Argentina (10 kg); USA (9 kg) ; Mexico (6 kg); Guatemala (5 kg)


Consumption by regions in the Americas

In Central America, rice consumption is low (18 kg/caput) compared to the Caribbean (48 kg/caput ) and South American countries (39 kg/caput), North America (9 kg/caput); and 27 kg/caput for average Americas

18 kg/caput 48 kg/caput

9 kg/caput

39 kg/caputRice

Consumption kg/ caput


Rice Consumption Trends in the Americas

5

7

9

11

13

15

17

19

21

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 0515

17

19

21

23

25

27

29

Consumption

Consumption caput

Million tons Kg caput

15 kg/caput

27 kg/caput


Rice Trade in the Americas: Large discrepancies between countries

Larger Rice Deficit(more than 100.000 t)Cuba, Brazil, Canada Mexico, Haiti, Costa Rica,Nicaragua, Dominican Rep. Colombia, ChileMinor Rice DeficitPeru, Panama, Guatemala Venezuela,Self-suppliersBolivia, Paraguay, Ecuador SurinameLarger Rice ExportersUSA, Uruguay, Argentina, Guyana

Americas

Countries

Areas

(000 t.)

Production

Rice Paddy

(000 t.)

Yields

T/ha

Net Imports/Export (000 t.)

Consumption

kg/caputAmericas 7 380 33 880 4,59 640 27

North America 1 260 9 630 7,65 2 590 9United States 1 260 9 630 2 920 9

Canada - - - -330 10Central America 310 1100 3,3 -1 050 18

Costa Rica 330 203 3,8 -110 53Panama 75 240 3,2 -30 60

Nicaragua 103 270 2,6 -125 30Mexico 56 280 5,0 -600 6

Honduras 4 12 2,9 -100 18El Salvador 4 20 5,0 -70 10Guatemala 17 36 2,5 -60 5

Caribbean 310 1150 3,7 -1 200 48Cuba 185 620 3,3 -700 72

Dominican Rep 85 415 4,9 -100 50Haiti 40 110 2,6 -325 47

Jamaica - - - -130 49Trinidad and T. - - - -57 44South America 5 500 22 000 4,00 300 39

Brazil 3 600 12 500 3,48 -450 43Peru 340 2 250 6,81 -80 45

Colombia 470 2 200 4,77 -100 33Ecuador 380 1 200 3,20 50 47Uruguay 180 1 200 6,50 750 22

Argentina 165 1 125 6,84 350 10Guyana 125 487 3,87 200 23

Suriname 50 187 3,80 20 25Venezuela 135 600 4,72 -22 19

Bolivia 145 400 2,70 -20 20Paraguay 30 114 3,95 -7 8

Chile 26 120 4,70 -100 12


Rice Trends in LAC

While significant improvement in rice production in LAC, regional demand still exceed productionNet deficit 2001-2006 nearly 1,7 Mt of milled rice a year (2,5 Mt paddy), representing US$500 millions a year

-5 000

-4 000

-3 000

-2 000

-1 000

0

1 000

2 000

1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005

Latin America & Caribbean Rice Deficit Trends


Rate of self-sufficiency

sources: based on FAO & USDA -data Production/Consumptionx100

Average 2000-2005

1 10 100 1 000

HaitiMexico

CubaChile

Costa RicaNicaragua

Dominican RepPanama

BrazilPeru

VenezuelaColombia

EcuadorSuriname

United StatesArgentina

GuyanaUruguay

CaribbeanCentral America

North AmericaSouth America

Americas


Rice trade in Americas

Regional supply trendsUSA (nearly 3Mt)Mercosur (Uruguay & Argentina, more 1Mt) Other origins ? (Guyana, Ecuador, Suriname, 0,3Mt)

Regional demand trendsCentral America (Mexico, Costa Rica, Nicaragua…, more 1Mt) Caribbean (Cuba, Haiti, Dominican Rep…, more 1Mt)Andin’s countries (Peru, Colombia, Chile…, more 0,3Mt)Brazil (between 0,5Mt and 0,7Mt)


Almost rice imports are supplied by regional exporters:

USA is a major exporter to Mexico and CanadaArgentina and Uruguay are major exporters to BrazilGuyana is a major exporter to Jamaica and Trinidad & TobagoEcuador exports Colombia & Peru

Rice Americas market is a regional market


Variable export and import trade flows

Importer type of rice OriginPaddy USA +++++

USA +++Uruguay + China +

Brokens USA +++++

Brokens Venezuela +++ Ecuador ++

Paddy USA +++++

MilledUSA +++++ Spain +++ Vietnam ++

BrokensVietnam +++ USA +++ Thailand ++

PaddyParaguay ++++ Uruguay +++ Argentina +++

Cuba

Milled Uruguay ++++ Argentina ++++Uruguay ++++ Argentina +++

Brokens

Brazil

USA +++ Venezuela ++USA +++ Ecuador +++ Venezuela ++

Milled

Mexico Milled

Paddy

Colombia

source: based on FAOSTAT

Importer type of rice OriginPaddy USA +++++

MilledThailand ++++ Argentina +++ USA ++

Paddy Italy +++++

Paddy USA +++++Milled USA +++++

Brokens USA +++++Husked USA ++Milled USA ++++++++Milled USA +++++

Brokens Central Am+++Paddy USA ++++++++Milled USA ++Paddy USA ++++

Brokens Central Am+++Paddy USA +++++++

Guatemala

Haiti

USA + Italy + Argentina +

Milled

Honduras

Milled Italie +++ USA ++

El Salvador

Chile

BrokensArgentina +++ Brazil ++ Thailand ++

Uruguay +++ USA +++ Brazil ++ Bolivia ++

MilledPeru

Brokens Ecuador ++++ Bolivia ++

Nicaragua

Dominican Rep


Rice Production in the Americas by Main Regions

La Plata River Basin8,3 Mtons (26%)

West Center & North

3,5 Mtons (11%)

Colombian & Venezuelian Llanos3,5 Mtons (11%)

Ecuador1,4 Mtons

Peru2,1 Mtons

Southtern States7,5 Mtons (24%)

California2 Mtons (6%)

Chile0,1 Mtons

Argentina1,1 Mtons Uruguay

1,2 Mtons

South Brazil6 Mtons

Caribbean1,2 Mtons (4%)

USA 9,5Mtons (30%) (11%)

Bolivia0,4 Mtons

(1%)

Guyana & Suriname0,6Mtons (2%)

Central America1,0 Mtons (3%)


Rice Outlook in Central America & Caribbean countries

Although all Central and Caribbean countries are net importers of rice, domestic production has increased because of yields improvement only. Dominican Republic is the largest producer in the area and yields are also respectable (4,9t/ha) ; However, average yield remains low at 3,5t/ha in Caribbean countries and 2,8t/ha in Central America, while average yield in South America are 4,0t/ha (and 5,0t/ha without Brazil) and 7,5t/ha in USA.

Rice yields t/ha

3,5 t/ha

4,0 t/ha

7,5 t/ha

2,8 t/ha


Central America & Caribbean countries: Major Importers

Cuba is the major importer, 0,7Mt of milled rice per year. Rice area is respectable (185.000 ha), but average yield remains low at 3,3 t/ha.Haiti is the third largest importer (0,3Mt). This country is a major recipient of USA rice exports to the region, mainly though food assistance programs.

Mexico is also a major importer (approaching 0,6Mt of milled rice per year). During the last decade rice area decline significantly.

Rice Imports

0,7Mt0,6Mt 0,3Mt


Mexico Rice Trends

Mexico Rice Areas & US Rice Imports

0

50000

100000

150000

200000

250000

300000

1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005

years

Mill

ions

tons

0

100

200

300

400

500

600

700

000

t.

source: FAO & USDA, 2006

US Rice Imports

Rice Areas

In 20 years rice area lost 70% while rice consumption rose by 80% and US rice Imports rose by 60% during this time. Yields are respectable (5,0 t/ha +66% from mid-1980)


Rice Outlook in South American

South American is a net exporter, of nearly 0,7 Mt of milled rice a year (1 Mt rice paddy), representing US$200 millions a year. Net exporters are Argentina, Uruguay, Guyana and SurinameParaguay and Bolivia are self-sufficientEcuador is also a net exporter. However, average yield remains low at 3,2 t/haIn several countries demand exceeds national production (Brazil, Chile, Colombia, Peru, Venezuela). In this countries rice imports exceed 800.000 ton (1,15Mt paddy rice)

Rice Trade Balance (000 t.)


Rice import trends in South America

Significant importsstarted in 1990’s (Peru), 2000’s (Colombia & Chile) where production decline because low prices, high production costs and lack of credit

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06

0

500

1 000

1 500

2 000

2 500

Imports

Production

0

50

100

150

200

250

300

350

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Mexico Colombia Brazil United States

US$/ton

Source: Fao, AgroStat, 2007

000 t.

Trend in Rice Producer Price


Rice Yields in South American

In Peru average yields are higher (6,82 t/ha) but rice areas declined until 2000’s. Recent years, domestic production has been in progress, due to areas expansion and yields improvement ; but Peru remains a net importerColombia and Venezuelaare largest producers in the area and yields are also respectable (4,75 t/ha)

Rice yields t/ha

3,48 t/ha6,82 t/ha

6,75 t/ha

6,65 t/ha

2,70 t/ha


Sustainability Rice Production in the America

Rice is grown in all Americas Countries.

Rice Areas decreased

Yields trends rose since 1980’s Green Revolution, irrigated areas 0

5

10

15

20

25

30

35

40

45

50

62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06

0,0

1,0

2,0

3,0

4,0

5,0

6,0

areas

Production

Yields

Millions tons & ha T/ha


In all Latin American countries, production increased at an annual rate of 3% while the area devoted to rice decreased at an annual rate of 1%. So, yields grew during the same period at an average of 4%But, in recent years Yields are stagnating

Rice Production areas & yieldsTrends in Latin America

0

5

10

15

20

25

30

35

61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

areas

ProductionYields

Million tons & ha T/ha


Rice Yield Trends

Rice Yield Trends in Worldwide

2 106

2 503

3 178

3 7113 997

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

1960-1970 1970-1980 1980-1990 1990-2000 2000-2010*

19%

27%

17%

8%

Rice Yield Trends in Latin America

1 668 1 720

2 199

3 152

4 028

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

1960-1970 1970-1980 1980-1990 1990-2000 2000-2010*

3%

28%

43%

28%


Rice Systems by ecologies in Latin America

Irrigated System represent 33% of total rice areasUpland Rice 58%

Main Countries Irrigated Rainfed lowland Upland Deepwater

Latin America 33 7 58 2Brazil 35 5 60 0

Colombia 67 10 23 0Cuba 100 0 0 0

Dominican Rep 93 7 0 0Ecuador 54 7 0 38Guyana 71 29 0 0

Peru 80 20 0 0Surinam 93 7 0 0Uruguay 100 0 0 0

Source : IRRI WRS, 2001


Central America yields (1970-80’s)South America Yields (1980-90’s)

Rice Trends in South & Central America

0

5

10

15

20

25

30

35

61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

areas

ProductionYields

0

1

1

2

2

3

3

61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 050,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

areas

ProductionYields

T/haMillions

South AmericaCentral America


Constraints and opportunity for rice production expansion

Yield increased thanks to combination of continues improvement in yields in the must favored irrigated ecology and in some upland areas, particularly in central Brazil (1980’s and 1990’s).Recent years

Slow growth in yieldLow producer pricesHigher costs of rice compared to Asian countries ; in most of the irrigated areas in South America costs vary between US$800 and US$950/ha (105 to 140$/ton) ; in Colombia production costs exceed 1200$/ha (235$/ton)

0

5

10

15

20

25

30

35

61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

areas

ProductionYields

Rice production

costUS$/ton

Vietnam 75 to 80Thailand 80 to 85

China 90 to 95India 95 to100

Uruguay 105 to 110Brazil 110 to 120

Ecuador 125 to 130Nigeria 140 to 145

United States 140 to 150Venezuela 170 to 175Colombia 230 to 235

Sources: USDA, FAO, ACA, CIRAD,

Induarroz, Sica

2003-04


The Longer term and its implications

Will South American became the main rice supplier for the Americas ?

Rice areas in irrigated system potential

Mercosur (more 1 Millions ha?)

Rice areas in Upland system potential

Colombian and Venezuelan Llanos (more 1 Mha)And…Cerrados in Brazil (3 Mha? 10

Mha? 40 Mha?)


Prospect Production and marketTrendsTrade agreement impacts ?

Bilateral free trade agreements between the US and the Latin American countries

Market segmentationInternational Exporters : Thailand (Africa, Asia) ; Vietnam (Asia), United States (Central America and Caribbean countries), Pakistan and India (Middle East)Regional International Exporters : Egypt (East Europe) ; Australia (Japan) ; Argentina et Uruguay (Brazil) ; Italy and Spain (European Union)

Influence from commodities worldwide demand ?Agro-energy Crops vs Food Crops


Patricio Patricio MéndezMéndez del Villardel VillarUnidad de investigacionUnidad de investigacion

Accion Colectiva, Politicas y MercadosAccion Colectiva, Politicas y Mercados

patricio.mendezpatricio.mendez@@cirad.frcirad.fr

Muchas Gracias! Muchas Gracias!

Documents

Rice Markets of the America’s: An Analyst Vie · Rice Markets of the America’s: An Analyst View Patricio Méndez del Villar Centre de Coopération Internationale en Recherche