Consistently higher production and more exportable supplies from Thailand are major factors in the decline in world rice prices in 2014 and continued

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1 Rice

2 Consistently higher production and more exportable supplies from Thailand are major factors in the decline in world rice prices in 2014 and continued lower levels over the next ten years. Part of the run-up in U.S. dollar rice prices prior to 2010/11 can be attributed to the depreciation of the dollar relative to many currencies, especially those in Asia. During this period, the dollar depreciated against the Chinese yuan, Thai baht, and Japanese yen. Rice prices in those currencies did not rise to the extent they did when denominated in the dollar. Little change in the value of the dollar compared to other currencies expected throughout the baseline period will contribute to the stability of agricultural, including rice prices. The U.S. is a relatively small player in world rice markets and therefore has limited impact on prices. Supply and utilization in major Asian rice producing and consuming countries shape prices on the world market. Rice area is projected to remain relatively stable over the next decade. As the dietary staple of most Asian populations, maintaining production is vital to local food supplies and economies. Nevertheless there will continue to be regions of area gains that offset declines elsewhere. Notably, Thailand and India are projected to slowly increase area, while China will gradually lose rice plantings. Rice yields are projected to increase at the same rate as they have historically. This rate of productivity increase will be sufficient to meet global rice demand. The 1% annual increase in global rice yields will outstrip the rate of population growth by 2020, and with stable area, rice supplies will be adequate to meet population-induced demand growth. Rice consumption is expected to increase with global population growth being the primary driver. Income impacts on rice in diets are different for different regions and income levels. As the traditional staple of Asia, the main consuming region, income impacts are quite small. In developed nations, income impacts on rice consumption are somewhat larger. In the U.S., for example, meals away from home are often ethnic cuisine that includes rice. Growing populations of Asians and Latin Americans have introduced their foods into the general American diet. Rice consumption is increasing in other regions of the world. Rice, while not the main staple, is also important in Latin American diets as it is in parts of Africa.

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4 The level of self-sufficiency in rice consuming nations is high compared to other grains. The proportion of the global crop that is traded is around 4%. Therefore, even modest changes in production can have relatively large impacts on trade. Thailand and India are the dominant rice exporters. Rice trade is a vital source of export earnings for these countries. Rice imports are more broadly distributed than exports with trade expanding in all regions of the world. China is expected to be a consistent importer and with the EU will be among the largest importers. In addition Malaysia has steadily been increasing purchases on the world market for more than a decade. Japan and South Korea are expected to continue importing at their committed tariff rate quota levels throughout the baseline period. With the outlook for stable prices resulting in smooth production and utilization patterns over the next ten years, it is expected that inventories will also be stable compared to consumption. As with other vital agricultural commodities, China s stock policy is to keep plenty of rice on hand to absorb production and price shocks, both domestic and abroad. This allows China to meet shortterm domestic needs without having to face volatile prices on the world market. The rest of the world has a lesser ability to weather market disruptions.

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6 World Rice Supply & Utilization 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 (Million hectares) Area Harvested (Metric tons per hectare) Yield, milled basis (Million metric tons) Supply Production Beginning stocks Net imports Utilization Consumption Ending stocks Net exports Total Demand

7 World Rice Supply & Utilization 14/15 15/16 16/17 17/18 18/19 19/20 20/12 21/22 22/23 23/24 24/25 (Million hectares) Area Harvested (Metric tons per hectare) Yield, milled basis (Million metric tons) Supply Production Beginning stocks Net imports Utilization Consumption Ending stocks Net exports Total Demand

8 Rice Area Harvested 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 (Million hectares) Argentina Australia Brazil China EU India Japan Malaysia Mexico South Korea Thailand United States Rest of world World total

9 Rice Area Harvested 14/15 15/16 16/17 17/18 18/19 19/20 20/12 21/22 22/23 23/24 24/25 (Million hectares) Argentina Australia Brazil China EU India Japan Malaysia Mexico South Korea Thailand United States Rest of world World total

10 Rice Trade 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 (Thousand metric tons) Net exporters Argentina Australia India 3,100 4,569 4,682 5,740 4,654 2,090 2,082 2,774 10,376 10,869 10,300 Thailand 10,137 7,274 7,374 9,554 10,003 8,270 8,747 10,447 6,345 6,122 10,000 United States 2,832 3,077 3,116 2,270 2,577 2,422 2,912 2,934 2,585 2,716 2,252 Total net exports 16,434 15,209 15,881 17,977 17,516 13,130 14,053 17,085 20,218 20,527 23,457 Net importers Brazil China ,349 2,803 3,758 EU-28 1, ,201 1,427 1,210 1,096 1,153 1,092 1,192 1,285 Japan Malaysia ,036 1, ,075 1, ,100 Mexico South Korea Rest of world 10,455 10,073 10,007 12,292 13,455 8,428 7,613 11,875 11,380 11,257 13,168 Total net imports 14,040 12,914 12,688 15,123 16,071 11,570 10,874 14,905 16,064 17,681 20,564 Residual 2,394 2,295 3,193 2,854 1,445 1,560 3,179 2,180 4,154 2,846 2,893 (Dollars per metric ton) Rice price, FOB Bangkok

11 Rice Trade 14/15 15/16 16/17 17/18 18/19 19/20 20/12 21/22 22/23 23/24 24/25 (Thousand metric tons) Net exporters Argentina Australia India 8,737 8,688 8,433 8,987 9,032 9,431 9,628 9,956 10,181 10,466 10,704 Thailand 10,990 10,225 10,684 11,161 11,450 11,638 11,871 12,018 12,050 12,019 12,080 United States 2,585 2,456 2,664 2,722 2,748 2,688 2,630 2,600 2,596 2,601 2,620 Total net exports 23,148 22,074 22,527 23,687 24,117 24,711 25,154 25,672 25,994 26,321 26,703 Net importers Brazil China 3,585 3,611 3,625 3,689 3,734 3,778 3,825 3,873 3,928 3,976 4,021 EU-28 1,281 1,148 1,172 1,194 1,203 1,207 1,196 1,190 1,189 1,187 1,172 Japan Malaysia 1,053 1,137 1,150 1,202 1,244 1,287 1,323 1,359 1,401 1,443 1,480 Mexico South Korea Rest of world 12,721 11,642 11,965 12,943 13,250 13,773 14,215 14,781 15,071 15,413 15,833 Total net imports 20,146 19,072 19,525 20,685 21,115 21,709 22,152 22,670 22,992 23,319 23,701 Residual 3,002 3,002 3,002 3,002 3,002 3,002 3,002 3,002 3,002 3,002 3,002 (Dollars per metric ton) Rice price, FOB Bangkok