What Are The Expectations For 2025?
US RICE PRODUCERS
KATY, TEXAS
It always feels good to start a new year. Even though the market didn’t have wildly
significant developments over the holidays, a fresh perspective always comes with January. Global markets remain soft because of India’s supply and a bumper harvest in Vietnam. Domestic prices remain firm in the face of this. That is great news, and we hope it holds for the sake of our members and the entire rice industry deep into 2025. The 28th Annual National Conservation Systems Cotton & Rice Conference, sponsored by the US Rice Producers Association and Cotton Incorporated January 27-28 in Memphis, Tennessee, will provide an opportunity to interact with farmers and gain insight on spring planting intentions.
The most recent FAO Rice Price Updateshows the FAO All Rice Price Index (FARPI) decreased by 1.2% to 119.2 points, marking a two-year low and 15.5% below its December 2023 level. Decreases in Indica and Aromatic rice quotations mainly drove this decline. At the same time, the Japonica index remained stable (because it’s been so low) and the Glutinous index increased slightly due to reduced harvest pressure. During the full calendar year, FARPI averaged 133.1 points, up 0.8% from 2023. This might seem strange based on current pricing but recall India held its export ban until September, so three-quarters of the year was based on significantly higher pricing.
A significant update on the political trade front is that after 25 years of negotiation, the EU and Mercosur countries (Brazil, Argentina, Uruguay, and Paraguay) signed an FTA in December. Significantly for rice, the EU agreed to a 60,000 metric ton quote for Mercosur rice imports with a gradual tariff reduction over five years to eventually be entirely duty-free. While this is “big news” this week, there isn’t any action being taken because it still needs to be ratified and implemented on both sides of the equation. It is an uphill battle for the EU alone but still will be a market factor in the coming days.
In the United States, the big news is the $70/acre emergency payment that Congress passed. While the hope is to receive the money in 90 days, there is concern that the transfer of power from the current administration to the next may result in some delays. Prices on the ground have remained consistent since our last report, and milled prices hold steady at around $800 pmt. There seems to be a bit of downward price pressure, but it hasn’t materialized yet. Long grain paddy prices FOB New Orleans have dropped below $370/ton as the low milling yields continue to complicate export business. The Mercosur harvest began about 10 days ago in Paraguay and the U.S. can expect stiff competition in Mexico, Central America, and other Western Hemisphere countries during 2025.
In Asia, prices have softened and are well below the $500pmt barrier to start the new year. Thailand is reported as low as $485 pmt, and Vietnam is cratered down to $425 pmt. India is resting at $445 pmt, while everyone is scrambling for business. The lowest of the lows will likely be seen in West Africa, while competition will remain fierce in other areas as well. Vietnam had a bumper crop, and there was only one way to liquidate those supplies…and it was not by increasing prices.
As of this writing, the most recent USDA Export Sales report is from the week ending December 26. The report shows net sales of 33,300 MT, down 64% from the previous week and 59% from the prior 4-week average. Exports of 28,400 MT were down 70% from the previous week and 64% from the prior 4-week average. Next week’s report will offer an update from the first week of the New Year. ∆
US RICE PRODUCERS