US rice futures fall on oversupply worries as Hurricane Ida hampers shipment
07:49, 1 September 2021
Rough rice futures in the US dropped on oversupply concerns as extreme weather disrupted exports from the country’s agricultural ports.
Chicago rough rice futures dropped 0.37% to USD 13.34 per hundredweight (cwt) on 31 August.
Stock inventories have been piling up, with rice exports temporarily paused as extreme weather conditions disrupted the busiest agricultural ports in the US, Tradingeconomics.com reported.
Hurricane halts river traffic, hurts crops
“Hurricane Ida’s passage near the Mississippi river halted traffic and caused power outages as well as damage to grain elevators and port terminals,” Trading Economics said.
According to the US Department of Agriculture (USDA), the US supplies high-quality long, medium and short grains to the global market. While the country accounts for less than 2% of global rice production, it ships more than 6% of global exports and is currently the fifth-largest exporter.
Hurricane Ida— a Category 4 storm – landed on US shores and ravaged through Mississippi and Louisiana, two states that are part of the US rice belt.
The hurricane could hurt crops in Mississippi, while crops in Louisiana were mostly harvested by the time the storm hit, PRICE Futures Group wrote in an emailed note.
“Harvest activities are stalled now in Louisiana and perhaps in Mississippi, although Mississippi has been slow to get started anyway,” the group wrote.
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Global output to hit record
In its forecast released on 16 August, the USDA said that US rice production for 2021/22 will be 13% smaller than a year earlier at 197.4 million cwt. The country’s all-rice exports in 2021/22 are projected at 91 million cwt, up 1 million cwt from the previous forecast, but still down more than 3% from the revised forecast 12 months earlier.
As for rice production globally, the USDA forecasts a record milled rice output of 507.6 million tonnes, up by 1.4 million from the previous forecast and more than 1.6 million tonnes larger than the previous year's crop.