Rice Industry Overview and Outlook

RICE | OUTLOOK & FUTURE PROSPECTS OUTLOOK: STABLE GLOBAL: PACRA Global Rice Production is forecast at 499.6mln tons (milled basis) in 2020/21, one percent higher than the previous year. Rise is expected to come from India and the US, while a decline is expected in Thailand and Bangladesh. Pakistan's production is also expected to grow in 2020/21. Global Rice consumption is expected to record at 496.4mln tons (milled basis) in 2020/21, up one percent from a year earlier. With production exceeding use, global ending stocks are also expected to increase by 2% in 2020/21. Global Rice Trade is expected to grow by 3% from a year earlier projected at 44mln tons. This is, however, below the record level of 48mln tons achieved in 2017. Sharp reductions in Nigeria, Bangladesh and Sri Lankan imports since 2017 contribute to this factor. In 2021, major export increase is expected from India, while Pakistan export quantum is expected to remain flat. Prices are expected to remain intact in the export market due to increased domestic consumption, particularly in China. A second wave of Covid-19 may result in panic buying of stocks further strengthening the prices. LOCAL No temporary bans or restrictions imposed on rice exports during COVID-19. Target Set for Rice Production in 2020/21 is around ~7.9mln MTs. During FY20, area under cultivation increased by ~8% to almost 3mln Hectares. Pakistan has been able to surpass USD2bln export mark in FY20. Although FY21 opened up with a significant dip in Rice Exports (~20%), major decline was witnessed in the first two months - July and August, owed to inventory pile up with the buyers amid Covid-19 situation. The situation is expected to ease up as new crop harvest awaits. Pakistan is still set to reach USD2.5bln export mark in FY21. Increased production in India and uplifting of Indian rice ban in the EU and Iran can adversely impact Pakistan Basmati Rice Export. However, Pakistan's quality of rice exported and strategical marketing strategies must secure its share. Source: https://www.ers.usda.gov/webdocs/outlooks/99385/rcs-20i.pdf?v=8489.9 & https://www.ztbl.com.pk/wp-content/uploads/Documents/Publications/Agriculture-Outlook/2020/A09-2020.pdf 26

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