Rice: Global Markets – Cuba a Major Importer Despite Push for Self Sufficiency

For 2016/17, global rice production is raised to a new record with larger crops in Colombia, South Korea, and Japan. Imports are lowered, particularly for Colombia and Vietnam. Exports are reduced for Burma and Cambodia. With consumption rising only slightly, stocks are forecast to grow.

Rice is a staple food in Cuba, with one of the highest per-capita consumption rates in the Western Hemisphere. Consumption is forecast at nearly 1.0 million tons in 2016/17. The Cuban government has committed to reduce its reliance on imports and support domestic production. Nonetheless, high costs have limited growth in production, and imports remain a critical source of more than half of its supplies.

Over the past decade, most imports have come from Asia, with Vietnam supplying the overwhelming majority due to low prices and favorable credit terms. More recently, Argentina, Brazil, and Uruguay have gained market share, an indication of improved prospects for Western Hemisphere suppliers.

For the first 9 months of 2016, almost a third of imports have come from these South American countries. Although the United States exported rice to Cuba from 2002 to 2008, reaching a high of 175,000 MT in 2004, financial and other restrictions remain key barriers to access.

With rice crops recently harvested in much of the Northern Hemisphere and lackluster global import demand, prices have trended lower for many major exporters. The decline has been most dramatic over the past month for Thailand, particularly for fragrant rice.

With a large new fragrant rice crop and sufficient stocks, prices in the past month have plummeted over 15 percent, narrowing the premium considerably over regular white rice. Moreover, Thai fragrant rice is at the lowest price in nearly a decade. In the context of rapidly declining prices, the Thai government recently set intervention prices and approved additional direct payments for harvest and post-harvest handling costs.

USDA, AGFAX

November 9, 2016

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