Reports CTRM for Agricultural and Soft Commodities

CTRM for Ags & Softs Given that it is commonly sold and consumed as a whole kernel, rice requires increased care during production, drying, storage, milling, and marketing in order to limit the amount of broken kernels and preserve its value to consumers. Rough rice will yield five different types of rice: hulls, bran, brown rice, whole-kernel milled rice, and brokens (broken-kernel milled rice). During processing or milling, th e hull of the rough rice is removed, yielding brown rice. Further milling will remove the bran layer of the rice, yielding white rice.Rough rice may be parboiled prior to milling in order to limit breakage during milling. Additionally, the steam pressure involved in parboiling will force many of the nutrients from the bran into the kernel, providing a higher nutritional value for white milled rice. Given this advantage, parboiled rice will generally sell at a premium. Once milled, every 100 pounds of rough rice yields, on average, almost 60 pounds of whole-kernel milled rice, 10-11 pounds of brokens, about 9 pounds of bran, and 20 pounds of hull. Rice Trading Given its status as one of, if not the most important food crops, rough rice is widely traded by both physical players, including producers, millers, and industrial consumers, as well as market speculators. Rice is traded at the Chicago Board of Trade (CBOT), the Dalian Commodities Exchange (DCE) in China and the Dojima Rice Exchange in Japan. Smaller, regional exchanges also exist in numerous countries around the world. Like all food crops, rice prices are influenced by a number of factors impacting production and/or demand:      World Rice Trade - USDA January/December Year, Thousand Metric Tons 2011/12 2012/13 2014/15 608 449 1,105 1,357 900 267 600 194 265 10,250 3,399 262 6,945 1,056 7,717 1,276 36,650 3,298 39,948 526 460 830 1,163 1,075 447 700 203 346 10,480 4,126 365 6,722 939 6,700 1,089 36,171 3,295 39,466 494 404 850 1,688 1,000 393 600 284 422 10,907 3,600 380 10,969 957 6,325 1,026 40,299 2,998 43,297 350 400 800 2,000 1,100 400 250 260 500 11,500 4,000 400 9,000 900 6,200 969 39,029 3,450 42,479 TY Imports Angola Bangladesh Brazil Cameroon China Cote d'Ivoire Cuba European Union Ghana Haiti Indonesia Iran Iraq Japan Kenya Malaysia Mexico Mozambique Nigeria Philippines Saudi Arabia Senegal South Africa United Arab Emirates Venezuela Others Subtotal Unaccounted United States World Total 360 53 732 450 2,900 1,265 330 1,313 595 372 1,960 1,500 1,478 650 400 1,006 680 445 3,400 1,500 1,193 1,200 870 430 375 11,017 36,474 2,834 640 39,948 430 114 712 550 3,483 830 413 1,375 725 416 650 2,220 1,294 690 410 885 746 500 2,400 1,000 1,326 1,075 990 440 500 11,639 35,813 2,978 675 39,466 496 1,290 586 610 4,168 950 377 1,556 590 385 1,225 1,650 1,080 669 440 989 658 500 3,200 1,800 1,410 1,200 910 450 480 12,558 40,227 2,315 755 43,297 450 600 450 525 4,500 1,100 450 1,580 500 420 1,400 1,500 1,100 650 450 950 700 480 4,000 1,800 1,460 1,100 980 460 500 10,923 39,028 2,681 770 42,479 Given the high water demand by rice crops, weather is a primary factor impacting production. The largest growers are also the largest consumers (China and India), and regional influences that affect those countries’ yields will have a profound effect, as shortfalls will need to be met with increased imports. Rising production costs, including irrigation, fuel and fertilizer costs can have a significant impact on prices. Increasing global populations, particularly in the areas of greatest rice consumption in the developing countries of Asia, will drive increased rice demand. Increasing populations are encroaching on productive land. For example, The Philippines currently imports about 15% of its rice. In the 1970s, it was a net exporter before real estate development reduced the land available for rice cultivation. © Commodity Technology Advisory LLC, 2016, All Right Reserved 2013/14 TY Exports Argentina Australia Brazil Burma Cambodia China Egypt European Union Guyana India Pakistan Paraguay Thailand Uruguay Vietnam Others Subtotal United States World Total 49

Reports CTRM for Agricultural and Soft Commodities | Page 50