Indonesia Rice Imports Soar to Highest in 5 Years
Prompted by concerns about rice supplies amid El Niño weather patterns, the Indonesian government announced intentions to import significant volumes of rice in 2023. While Indonesia is the fourth largest consumer, it typically produces enough to satisfy domestic needs. However, Indonesia does import intermittently and when that happens, it can sharply impact global trade. In 2023, imports are forecast to nearly quadruple from the prior year, making Indonesia the third-largest importer. Imports are forecast to decline in 2024, but are still anticipated to be well above average, straining an already tight global rice market.
The Indonesian government operates several food security programs, relying mostly on domestically supplied rice through the auspices of the state-owned logistics company BULOG. In March, the government authorized BULOG to import rice amid lower-than-anticipated domestic procurement and tighter stocks, leading imports to accelerate over 2023 with a recent authorization for more imports.
The surge in import demand from Indonesia comes at a time when global exportable supplies are constrained. India was the top supplier to Indonesia in 2021 and 2022, and the two countries had discussed a deal for up to 1 million tons of imports prior to India’s ban imposed in July on certain rice exports. Thus far this year, Indonesia has mostly purchased from Vietnam and Thailand, one factor in the decline in stocks in those countries. Pakistan exports to Indonesia were virtually nonexistent over the past year due to its smallest crop in a dozen years harvested last fall, though Pakistan’s current crop being harvested now will rebound significantly, resulting in more available supplies. Indonesia has also expressed an intention to import 1 million tons from China, which if realized would be the largest quantity from China since 1998. Chinese prices are competitive relative to other exporters and may provide relief in a tight global market. Despite Indonesian government authorization to buy another 2 million tons by the end of 2023, based on the tight global market situation, USDA forecasts Indonesia 2023 imports at 2.8 million tons, with 2024 imports raised to 1.4 million.
WHEAT
OVERVIEW FOR 2023/24
Global production is forecast down from last year’s record with smaller crops this month for Australia, Ethiopia, and Kazakhstan.
Global trade is forecast down 3 percent from the prior year and was reduced further this month with lower-than-expected import growth for Nigeria, Kazakhstan, and Iran.
Global exports are cut further from last year based largely on a lower forecast for Australia.
Global stocks are forecast down, reaching the lowest level since 2015/16. The U.S. season-average farm price is lowered 20 cents per bushel to $7.30.
WHEAT PRICES
Domestic: U.S. quotes have mostly climbed since the September WASDE. Soft Red Winter (SRW) had the largest increase, up $15/ton to $251, with recent sales to China demonstrating improved overseas demand. Hard Red Spring (HRS) prices rose $7/ton to $315 on reasonably strong export sales to date, especially to Asia. Soft White Wheat (SWW) prices also climbed $4/ton to $273. Meanwhile, Hard Red Winter (HRW) quotes declined $9/ton to $305 on sluggish export sales to date and declining international prices. Total commitments, as reported by the FAS U.S. Export Sales report, are down 46 percent from the same week last year due to tighter supplies and uncompetitive pricing.
Global: Overall, major exporter quotes declined since the September WASDE with strong ongoing export competition from Russia and the EU as well as Ukrainian grain exports from Odessa for the first time since the end of the Black Sea Grain Initiative. Russian quotes experienced the largest decline, dropping $18/ton, with the conclusion of the wheat harvest and ample supplies. Argentine quotes fell $17/ton on pressure from other exporters. U.S. quotes slid $9/ton on a larger-than-expected spring wheat production in the recent NASS Small Grains Summary report. Canadian quotes declined $6/ton as Statistics Canada published a slightly higher all-wheat production forecast. Conversely, Australian quotes were up $4/ton with growing concern of crop conditions. EU quotes were virtually unchanged as strong demand for EU supplies in Asia and Africa balanced stiff competition from Russia.
RICE
OVERVIEW FOR 2023/24
Global rice production is forecast virtually unchanged this month but remains a record.
Global consumption is forecast higher with increases in Indonesia, Colombia, and China. Imports are forecast up primarily for Indonesia given the government’s announcement to import more to ensure sufficient supplies.
Exports are forecast up primarily for Cambodia, China, and Vietnam.
Global stocks continue to decline from the prior year.
OVERVIEW FOR 2022/23
Global rice production is up slightly.
Global consumption is down with less rice consumed in Cambodia and the European Union.
Exports are up primarily for Cambodia, China, and at a record high for Vietnam. Imports are higher for Indonesia and Vietnam, more than offsetting lower imports for China and Iraq.
RICE PRICES
In the past month, U.S. export quotes remained at $760/ton, while Uruguayan quotes rose $70 to $750/ton on tightening supplies. Thai quotes fell $59 to $595/ton and Vietnamese quotes fell $27 to $616/ton as buyers held off on new purchases and waited for lower prices. Pakistani quotes dropped $56 to $554/ton, anticipating a near-record harvest. Export quotes for India white rice have been unavailable since India’s imposition of an export ban on July 20.
COARSE GRAINS
OVERVIEW FOR 2023/24
Global corn production is forecast marginally higher, with increased production in Argentina, the European Union, Moldova, and Paraguay more than offsetting a cut to the United States.
Global trade is revised fractionally higher, with increased imports for Brazil.
Global exports are also forecast slightly higher, with increased exports from Argentina and Paraguay more than offsetting reduced exports from the United States.
The U.S. season-average farm price is raised to $4.95 per bushel.
OVERVIEW FOR 2022/23
Global corn production is lower with cuts to Moldova and the United States more than offsetting slight gains to Paraguay.
Estimates for global imports are lowered, with cuts to Bangladesh, European Union, Iran, Israel, and Saudi Arabia more than offsetting gains to Egypt, Iraq, and Mexico.
Global export estimates remain virtually unchanged, with reductions to Brazil and Ukraine exports offsetting stronger exports from Argentina, the European Union, and the United States.
The U.S. season-average farm price is finalized at $6.54 per bushel.
CORN PRICES
Since the September WASDE, U.S. and Brazilian bids have moderated, while Argentine bids have soared.
As of October 10, U.S. bids were $229/ton, down $6 from last month. Early-season demand for U.S. corn remains soft likely due to poor Mississippi River system logistics and competition from other exporters including Brazil. Brazilian bids were $221/ton, down $3 from last month.
Record exportable supplies and competition with U.S. new crop supplies are supporting downward pressure on bids. Argentine bids were $258/ton, up $24 from last month. Supplies from this season's poor harvest have become more limited, supporting sharply higher prices. Ukrainian bids have not been published since July 21.
Source: https://apps.fas.usda.gov/psdonline/circulars/grain.pdf
Prompted by concerns about rice supplies amid El Niño weather patterns, the Indonesian government announced intentions to import significant volumes of rice in 2023. While Indonesia is the fourth largest consumer, it typically produces enough to satisfy domestic needs. However, Indonesia does import intermittently and when that happens, it can sharply impact global trade. In 2023, imports are forecast to nearly quadruple from the prior year, making Indonesia the third-largest importer. Imports are forecast to decline in 2024, but are still anticipated to be well above average, straining an already tight global rice market.
The Indonesian government operates several food security programs, relying mostly on domestically supplied rice through the auspices of the state-owned logistics company BULOG. In March, the government authorized BULOG to import rice amid lower-than-anticipated domestic procurement and tighter stocks, leading imports to accelerate over 2023 with a recent authorization for more imports.
The surge in import demand from Indonesia comes at a time when global exportable supplies are constrained. India was the top supplier to Indonesia in 2021 and 2022, and the two countries had discussed a deal for up to 1 million tons of imports prior to India’s ban imposed in July on certain rice exports. Thus far this year, Indonesia has mostly purchased from Vietnam and Thailand, one factor in the decline in stocks in those countries. Pakistan exports to Indonesia were virtually nonexistent over the past year due to its smallest crop in a dozen years harvested last fall, though Pakistan’s current crop being harvested now will rebound significantly, resulting in more available supplies. Indonesia has also expressed an intention to import 1 million tons from China, which if realized would be the largest quantity from China since 1998. Chinese prices are competitive relative to other exporters and may provide relief in a tight global market. Despite Indonesian government authorization to buy another 2 million tons by the end of 2023, based on the tight global market situation, USDA forecasts Indonesia 2023 imports at 2.8 million tons, with 2024 imports raised to 1.4 million.
WHEAT
OVERVIEW FOR 2023/24
Global production is forecast down from last year’s record with smaller crops this month for Australia, Ethiopia, and Kazakhstan.
Global trade is forecast down 3 percent from the prior year and was reduced further this month with lower-than-expected import growth for Nigeria, Kazakhstan, and Iran.
Global exports are cut further from last year based largely on a lower forecast for Australia.
Global stocks are forecast down, reaching the lowest level since 2015/16. The U.S. season-average farm price is lowered 20 cents per bushel to $7.30.
WHEAT PRICES
Domestic: U.S. quotes have mostly climbed since the September WASDE. Soft Red Winter (SRW) had the largest increase, up $15/ton to $251, with recent sales to China demonstrating improved overseas demand. Hard Red Spring (HRS) prices rose $7/ton to $315 on reasonably strong export sales to date, especially to Asia. Soft White Wheat (SWW) prices also climbed $4/ton to $273. Meanwhile, Hard Red Winter (HRW) quotes declined $9/ton to $305 on sluggish export sales to date and declining international prices. Total commitments, as reported by the FAS U.S. Export Sales report, are down 46 percent from the same week last year due to tighter supplies and uncompetitive pricing.
Global: Overall, major exporter quotes declined since the September WASDE with strong ongoing export competition from Russia and the EU as well as Ukrainian grain exports from Odessa for the first time since the end of the Black Sea Grain Initiative. Russian quotes experienced the largest decline, dropping $18/ton, with the conclusion of the wheat harvest and ample supplies. Argentine quotes fell $17/ton on pressure from other exporters. U.S. quotes slid $9/ton on a larger-than-expected spring wheat production in the recent NASS Small Grains Summary report. Canadian quotes declined $6/ton as Statistics Canada published a slightly higher all-wheat production forecast. Conversely, Australian quotes were up $4/ton with growing concern of crop conditions. EU quotes were virtually unchanged as strong demand for EU supplies in Asia and Africa balanced stiff competition from Russia.
RICE
OVERVIEW FOR 2023/24
Global rice production is forecast virtually unchanged this month but remains a record.
Global consumption is forecast higher with increases in Indonesia, Colombia, and China. Imports are forecast up primarily for Indonesia given the government’s announcement to import more to ensure sufficient supplies.
Exports are forecast up primarily for Cambodia, China, and Vietnam.
Global stocks continue to decline from the prior year.
OVERVIEW FOR 2022/23
Global rice production is up slightly.
Global consumption is down with less rice consumed in Cambodia and the European Union.
Exports are up primarily for Cambodia, China, and at a record high for Vietnam. Imports are higher for Indonesia and Vietnam, more than offsetting lower imports for China and Iraq.
RICE PRICES
In the past month, U.S. export quotes remained at $760/ton, while Uruguayan quotes rose $70 to $750/ton on tightening supplies. Thai quotes fell $59 to $595/ton and Vietnamese quotes fell $27 to $616/ton as buyers held off on new purchases and waited for lower prices. Pakistani quotes dropped $56 to $554/ton, anticipating a near-record harvest. Export quotes for India white rice have been unavailable since India’s imposition of an export ban on July 20.
COARSE GRAINS
OVERVIEW FOR 2023/24
Global corn production is forecast marginally higher, with increased production in Argentina, the European Union, Moldova, and Paraguay more than offsetting a cut to the United States.
Global trade is revised fractionally higher, with increased imports for Brazil.
Global exports are also forecast slightly higher, with increased exports from Argentina and Paraguay more than offsetting reduced exports from the United States.
The U.S. season-average farm price is raised to $4.95 per bushel.
OVERVIEW FOR 2022/23
Global corn production is lower with cuts to Moldova and the United States more than offsetting slight gains to Paraguay.
Estimates for global imports are lowered, with cuts to Bangladesh, European Union, Iran, Israel, and Saudi Arabia more than offsetting gains to Egypt, Iraq, and Mexico.
Global export estimates remain virtually unchanged, with reductions to Brazil and Ukraine exports offsetting stronger exports from Argentina, the European Union, and the United States.
The U.S. season-average farm price is finalized at $6.54 per bushel.
CORN PRICES
Since the September WASDE, U.S. and Brazilian bids have moderated, while Argentine bids have soared.
As of October 10, U.S. bids were $229/ton, down $6 from last month. Early-season demand for U.S. corn remains soft likely due to poor Mississippi River system logistics and competition from other exporters including Brazil. Brazilian bids were $221/ton, down $3 from last month.
Record exportable supplies and competition with U.S. new crop supplies are supporting downward pressure on bids. Argentine bids were $258/ton, up $24 from last month. Supplies from this season's poor harvest have become more limited, supporting sharply higher prices. Ukrainian bids have not been published since July 21.
Source: https://apps.fas.usda.gov/psdonline/circulars/grain.pdf