INTELLIGENCE REPORT WORLD RICE OUTLOOK,1975

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000500200006-0
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 13
• Document Creation Date: December 16, 2016
• Document Release Date: November 9, 2004
• Sequence Number: 6
• Publication Date: March 1, 1975
• Content Type: IR

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on ential
Intelligence Report
World Rice Outlook 1975
Confidential
ER IR 75-5
March 1975
Co y V2 11
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World Rice Outlook, 1975
? At 315 million metric tons, the 1974/75 world rice harvest will nearly
equal last year's record.
? Exporc availabilities this calendar year could exceed last year's level by
1 million tons.
? With demand relatively unchanged, the world rice price of about US $440
a ton is expected to decline. The extent will largely depend on the US
rice crop and other Northern Hemisphere foodgrains.
? World stocks may increase somewhat but will remain far below pre-1973
levels.
? US rice supplies available for export from the 1974/75 crop will total
about 2.5 million tons. At current prices, export sales and PL-480
shipments should reach about 2.2 million tons.
Note: Comments and queries regarding this report are welcomed. They may be
directed to f the Office of Economic Research,
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Confidential March 1975
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I. The poor rice harvest in 1972/731 pushed prices to record 1 ighs in 1973
and forced many Poore' countries to cut rice imports sharply. As result, their
stocks were depleted, znd they substituted imports of cheaper food-,rains such as
wheat. While last year's bumper harvest brought some relief, prices were still higher
and stocks lower than pre-1973 levels. This report assesses the current world
supply/demand situation for rice and the impact on stocks and pric;s in the coming
year.
1974/75 Production Prospects2
2. The 1974/75 world rice harvest is forecast at 315 miihon tons, less than
1% below last year's record crop of 316 million tons. The cc rnbination of high
prices and good weather resulted in increased acreage and :?;olds in the United
States and a number of other key countries. These increases, however, will not
offset shortfalls in South Asia (see Table 1).
3. In the United States, a 12% it:^rease in plantings, 15% more harvested
acreage, and 7% higher yields than a year earlier should produce a 1974/75 record
crop of 5.2 million tons - 2410 higher than last year. Elsewhere in the Western
Hemisphere, the increase will be about 6.5%.
4. A world production record would have been :t except for problems
in Bangladesh. India, and Burma. Floods last June and .! ely may have destroyed
500,000 tons of the first of Bangladesh's three rice craps and delayed planting
of the "amman," or autumn, crop. Increased moisture i d good weather, however,
probably increased the aman harvest to 10.5 million tons - 300,000 tons more
than in 1973. This spring's harvest should reach about 3.7 million tons, bringing
the season's total output to 18.0 million tons, compared with 18.5 million tons
a year earlier. In India, increased moisture in some states failed to offset the impact
of drought in others. Thus, the estimated 1974/75 harvest of 60 million tons is
down about 6 million tons from earlier expectations. In Burma, the worst flood
1. Rice crop years have been calculated on a 1 August-31 July basis. Production data are expressed in
terms of paddy rice. Trade data are expresser', in milled rice and refer to calendar years. Paddy rice can
be converted to milled by multiplying by an average factor of 0.66.
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World Paddy Rice Production]
1970/71
1971/72
1972/73
1973/74
1974/752
Total
304.3
299.4
293.6
316.2
313.0
Western Hemisphere
14.0
13.4
13.3
15.0
16.7
Brazil
6.3
5.1
5.3
6.2
6.5
United States
3.8
3.9
3.9
4.2
5.2
Other
3.9
4.4
4.1
4.6
5.0
Africa, Europe, Oceania
9.("
9.2
9.0
9,5
9.5
Ausjralia
0.3
9.2
0.3
0.4
%.4
Egypt
2.5
2.5
2.6
2.3
2.4
ItcJy
G.8
0.9
0.8
1.0
1.0
Malagasy Republic
1.9
1 9
1.3
2.0
2.0
Other
3.5
3 '/
35
3.8
3.7
Asia
231.3
276.8
271.3
291.1
288.8
Bangladesh
16.8
14.9
15.4
18.5
18.0
Burma
1:1
8?2
7.4
8.3
7.6
Cambodia
2.7
2.1
1.0
0.7
0.5
India
63.7
64.7
58.9
65.7
60.0
Indonesia
18.5
19.6
20.5
22.6
23.5
Japan
15.9
13.6
14.9
15.2
15.4
Korea, North
3.0
3.0
2.5
-1.0
4.0
Korea, South
5.6
5.6
5.5
5.9
6.0
Pakistan
3.2
3.4
3.5
3.6
3.6
Peoples Republic of China
102.0
99.0
103.0
105.0
105.0
Philippines
5.3
5.2
4.4
5.6
5.9
Taiwan
2.9
3.0
3.1
2.8
3.2
Thailand
13.4
14.2
11.7
14.0
14.3
Vietnam, North
4.5
3.7
4.6
4.0
4.5
Vietnam, South
5.7
6.1
5.9
6.6
6.9
Other
10.0
10.5
9.0
1.0.2
10.4
1. By crop year (I At dust-31 July).
2. Preliminary.
in 60 years destroyed more than 10% of the fall crop and resulted in 1974/75
production falling about 700,000 tons below last year to 7.6 million tons.
5. Elsewhere in Asia, rice harvests are reported to be good. Weather was
generally favorable, and high world prices prompted an expansion of acreage. A
record 23.5 million ton harvest is forecast for Indonesia, partly as a result of
increased use of fertilizers and intensive government programs. Thailand, an
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important exporter, expects a near-record crop of 14.3 million tons.3 The fall crop
recovered from the drought of June and July following the arrival of Monsoon
rains in August. Thailand's spring crop should be larger than a year ago because
of expanded irrigated acreage. Pakistan increased acreage, but drought lowered
irrigation water and hurt yields. As a result, output will be about the same as
last year's record 3.6 million tons.
ti. Record crops are also expected in the Philippines, North Korea, Sou'h
V?etnam, and Taiwan. In Japan, good weather and a 5% increase in plantings,
induced by the 6iminatio.7 of government subsidies that encouraged farmers to
leave rice and fall-"v, will boost production 200,000 tons, to 15.4 million tons.
The subsidy was eliminated as part of a long-range Japanese plan to achieve
self-s~?i'ticiency and to maintLin tt least I million tons of brown rice in reserve.
The harvest in The Peoples Republic of China is expected to equal last year's
average crop.
Lx ort Availabilities in 1975
7. Rice available for export this year is projected at 8.7 million tons, or
I4 t/ more than last year's actual exports mainly because of increased supplies from
the United States and Thailand (see Table 2). The excellent 1974 US harvest will
make up to 2.5 million tons available for export, assuming no stock buildup.
Thailand's export availability could reach 1.4 million tons - 1 million tons from
the 1974/75 harvest and 400,000 tons from stocks. However, the recent floods
and subsequent domestic fears of shortages may force Bangkok to restrict rice
exports as it did last year.
9. Italy, the EC's major rice producer and exporter, has 550,OCt) tons of
rice available for export this year - 100,000 tons more than was exported in 1974.
In December, EC authorities canceled export levies or semi- and fully-milled
long-grain rice to third countries in an effort co increase exports. Prior to the
cancellation, the export levy was aoout $121 per ton.
10. In all of Asia, despite a 3 million ton drop in paddy production, rice
available for export is expected to be up by 2% over last year, or about 100,000
tons. Neither the food shortage in Bangladesh nor the poor rice harvests in India
and Burma will affect the amount of rice available for export. Both Bangladesh
and India consume nearly all of the rice they produce. Despite recent floods, Burma,
3. Floods early this year in Thailand destroyed about 200,000 tons of the spring crop but caused only
limited damage in Burma.
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World Milled Rice Exportsl
Thousand Metric Tons
1970
1971
1972
1973 19742 19753
Total
7,644
8,209
7,976
6,924 7,655 8,70
Western Hemisphere
2,069
1,913
2,137
1,897 2,120 2,875
Brazil
95
149
1
35 20
United States
1,695
1,415
1,965
1,589 1,800 2,500
Other
Af
279
349
171
273 300 375
rica, Europe, Oceania
1,353
1,305
1,253
b48 1,117 1,300
Australia
E
111
186
172
163 136 180
gypt
654
515
456
298 320 350
Italy
M
347
438
428
198 450 550
alagasy Republic
68
36
26
6 60 65
Other
A
173
130
171
183 151 155
sia
B
4,222
4,991
4,586
4,179 4,418 4,525
urma
J
719
800
519
146 200 200
apan
P
k
630
900
183
517 268 100
a
istan
P
130
197
300
771 600 600
eoples Republic of China
'
1,000
1,000
1,000
1,200 1,500 1,500
Thailand
O
h
1,064
1,576
2,112
848 1,100 1,400
t
er
679
518
47?
697 750 725
1. By c,lendar year.
2. Preliminary.
3. Estimate of availability for export at current prices.
with severe foreign exchange shortages, would rather reduce domestic supplies than
cut rice exports below the 200,000 tons c ;ported last year.
11. An increase in available exports from Thailand and North Korea in 1975
will offset a drop in expected exports from Japan and Taiwan. In 1974, North
Korea entered the Free World rice market for the first time when it sold about
400,000 tons to Indonesia. Only about one-half was delivered in 1974, with the
remaining 200,000 tons scheduled for delivery in 1975.
12. Japan'; decision to increase stocks about 150,000 tons will mean a cut
in exports despite a slightly larger crop. In Pakistr.n, a shortfall in the summer
rice harvest will hold export availabilities to last year's level of 600,000 tons. A
large amount of Pakistani rice is of low quality and the least acceptable in Asian
markets because of the high percentage of broken grain and insect infestation.
Thus, Pakistani rice sales will be concentrated in markets where price is the prime
consideration. Taiwan's official predictions of smaller exports this year despite a
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record harvest suggest a stock buildup and/or increased domestic consumption. We
estimate that The Peoples Republic of China will have about the same amount
of rice available for export in 1973 as in 1974 - 1.5 million tons. Chinese activity
in many Asian export markets his caused some concern to Thailand, the traditional
supplier.
Import Demand in 1975
13. We now estimate that world import demand will be about 7.7 million
tons, or 1 million tons less than the supply. Even if a Im e increase in Middle
East demand materializes, excellent rice harvests in a number of Asian importing
countries, the high price of rice relative to other foodgrains, and improved stock
levels in a few large importing countries should hold demand to about the 1974
level (see Table 3).
World Milled Rice Imports]
Thousand Metric Tons
1970
1971
1972
:973
19742
19753
Total
7,633
8,209
7,976
7,112
7,655
7,675
Western Hemisphere
460
550
523
545
630
650
Africa, Europe, Oceania
1,773
1,981
1,985
1,633
1,720
2,000
Asia
5,400
5,677
5,468
4,934
5,305
5,025
Bangladesh
568
348
563
204
100
200
Hong Kong
345
371
361
369
400
350
India
206
540
419
????
????
????
Indonesia
956
494
712
1,657
1,200
700
Iran
6
61
80
55
350
450
Iraq
2
97
45
135
265
325
Malaysia, West
272
148
122
50
240
200
Philippines
....
437
500
311
180
100
Singapore
276
277
358
231
200
200
South Korea
750
1,007
565
395
300
350
South Vietnam
559
137
300
270
300
200
Sri Lanka
534
339
266
343
300
500
USSR
323
332
280
154
280
250
Other
603
1,089
897
760
1,190
1,200
1. By calendar year.
2. Preliminary.
3. Estimate of import demand at current prices.
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14. Rice imports by Middle East nations increased dramatically from about
770,000 tons in 1973 to nearly 1.4 million tons in 1974 and are forecast at 1.8
million tons this year. Lower world prices will boost 19'75 imports by Africa and
Europe about 15% to approximately 2 million tons. In Sri Lanka, reported drought
damage to the winter rice crop may raise import requirements 200,000 tons above
last year's 300,000 tons. Bangladesh is primarily dependent on foreign aid for rice
imports and will probably receive about 200,000 tons in 1975, 100,000 tons more
than last year.
15. These increases in import demand, however, will be offset by a significant
drop in demand by traditional Asian rice importers. Indonesia, the world's largest
rice importer, had a record 1974/75 harvest and will have stocks of 1.3 million
tons by early 1975. Also, excellent harvests in the Philippines, South Vietnam,
and Malaysia should reduce their demand for imported rice. Despite lower rice
production, India is expected to import a large quantity of cheaper grains rather
than rice.
16. Poor crops in 1971/72 and 1972/73 lowered rice stocks in some countries
by as much as 80% to 90% (see Table 4). Despite a record harvest in 1973/74,
world rice scocks increased only marginally except in the United States. The record
Asian h;,,-vest was mainly used to increase the per capita consumption of an
expandin+" population.
17. World stocks, although expected to increase this year, will still be less
than half the 1971 level. In Brazil, increased production and government policies
aimed at discouraging exports to increase domestic supply and lower prices may
double stocks to about 550,000 tons by 1 April. Privately held stocks in Japan
may decrease 50,000 tons as a result of a sharp increase in consumer prices, but
government-held stocks are planned to increase by 200,000 tons by I November.
Stock buildups are also expected in the United States, Thailand, Indonesia, South
Korea, and Taiwan owing to good harvests. Government-held stocks in India,
however, will decrease 1 million tons, to 3 million tons - one-half the 1971 level.
Price Implications for 1975
18. Some further weakening of prices on the world rice market is expected.
Prices have been on the downside since reaching highs in late 1973 and early 1974
(see Figure 1 and Table 5). The price differential between rice and cheaper grains
reached highs in early 1974. The rice-wheat spread, for example, peaked in May
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Table 4
Beginning Rice Stocks (Milled Basis) in Selected Countries
Thousand Metric Tons
1969-71
Season
Beginning
Annual
Average
1971
1972
1973
1974
19751
Total
18,086
18,153
14,173
8,373
8,492
8,865
Brazil
1 Apr
1,176
1,043
537
62
288
549
India2
1 Nov
6,0001
6,000
5,650
3,500
4,000
3,000
Indonesia
1 Apr
1,0001
1,146
1,229
604
942
1,300
Italy
1 Aug
45
65
17
42
208
127
Japan
I Nov
6,162
6,057
3,288
1,730
1,456
1,598
Malaysia, West
i Jan
237
300
250
100
100
150
Philippines
1 Jul
506
501
712
151
247
247
South Korea
1 Oct
5001
491
613
642
158
300
Taiwan
IJul
395
412
266
196
118
165
Thailand
1 Jan
1,5001
1,521
1,232
1,178
719
879
United States
1 Aug
565
617
379
168
256
550
1. Projected or estimated.
2. Government stocks only.
Thailand: Export Prices for Milled Rice 1
1969
1970
1971
1972
1973
1974
1975
Jan
181.20
154.20
139.20
133.81
179.21
541.33
400.00
Feb
178.80
151.20
125.10
129.74
198.10
575.00
411.00
Mar
185.20
143.04
115.20
130.45
204.652
597.50
Apr
183.60
139.20
112.80
128.96
....
629.00
May
190.80
139.20
123.84
132.36
....
625.00
Jun
197.76
141.60
127.20
136.06
....
596.25
Jul
198.60
142.80
129.00
137.73
....
519.00
Aug
188.40
145.68
131.52
159.86
....
521.25
Sep
186.68
142.20
139.89
160.79
....
514.00
Oct
185.40
142.50
138.82
167.62
....
493.75
Nov
186.00
141.60
135.76
175.71
....
452.50
Dec
178.56
138.00
134.00
183.64
....
424.00
1. Thai white rice (5% brokens), f.o.b. Bangkok. Monthly average.
2. Thailand suspended price quotations from 5 March 1973 until January 1974 and reduced exports because of
domestic rice shortages.
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1974 at $490 a ton, compared with earlier levels of around $145 a ton (see
Figure 2). Faced with declining foreign exchange positions, rice importers
increasingly turned to cheaper grains. If the current tight world situation for other
grains worsens, however, and the price differential between rice and other grains
approaches more traditional levels, then some increase in demand and prices could
occur. Stock policies in key rice-importing countries, the general economic climate,
and expectations for the 1975/76 world rice harvest beginning in August could
also influence demand.
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US Rice Export Prices'
700 r- US$ Per Metric Ton
11 111 11111 11111 11 111111 111111 1 111 111
1972
No. 2 medium grain, 4% brokens, f.o.b. mills, Houston, Texas.
Rice-Wheat Price Differential'
600 US $ Per Metric Ton
500
400
1972 1973 1974 Jan 75
'The price of No. 2 medium grain rice, 4% brokens, f.o.b. mills, Houston,Toxas, less the price of hard winter wheat, ordinary protein, f.o.b. vessel, Gulf ports.
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