The past year for the rice market has been a roller coaster.

“You can’t talk about the marketing year and not talk about trade and COVID,” said Michael Deliberto, LSU AgCenter economist.

Rice future prices increased dramatically to about $22 per hundredweight ($35.64 per barrel or $9.90 a bushel) during the summer, he said, but “that was the result of limited supply of old rice.”

However, that price seldom made it to the cash market, he said, and most farmers had already sold their 2019 crop.

Exports to Iraq and Central America also gave American rice a boost, he said, and prices also increased after panic buying caused by the COVID-19 pandemic. Food supply concerns spurred a buying spree.

Speculators entered the rice market, and that boosted prices more during the pandemic, he said.

But overseas trade for American rice fell off later in the year, and the high prices caused foreign buyers to delay purchases, he said.

September prices settled around $12-12.50 per cwt. ($5.40-$5.63 per bushel, $19.44-$20.25 per barrel), which was reflective of new crop growing conditions and anticipated supplies.

For 2021, Deliberto said weaker prices are projected by the U.S. Department of Agriculture, with an estimate of $11.50 per cwt. ($18.63 a barrel, $5.18 a bushel) compared to $12 last year ($5.40 per bushel or $19.44 per barrel) for long-grain rice.

Prices have fallen because of the good harvest this year coupled with the increased acreage in all rice-growing states.

Louisiana acreage increased to 476,000 acres compared to 410,000 in 2019.

On the export side, Mexico remains the dominant buyer of American rice. Deliberto said Mexican purchases increased by 8%, and the rest of Latin America continues to buy American rice.

Total U.S. rice exports in 2020-21 are projected to be 5% larger than a year earlier and the highest since 2016-17, Deliberto said. Long-grain exports are projected 10% larger than a year earlier. The year-to-year increase in U.S. long-grain exports is based on larger supplies and expectations of more competitive U.S. prices with South American exporters.

In addition to large U.S. sales to Brazil early in the 2020-21 marketing year, Deliberto said a current extremely tight supply situation will exist in the MERCOSUR rice exporting countries (Argentina, Brazil, Paraguay and Uruguay) until their spring 2021 harvest is complete, likely boosting U.S. sales to Latin America over the next several months.

But he said there are challengers to the domestic U.S. market.

He said speculation that Iraq will announce a rice tender provides positive price speculation for the market and raises the question whether infrequent export demand for U.S. rice can materialize into an established export market.

Meanwhile, U.S. rice producers continue to face competition from overseas.

“Rice imports continue to be elevated year after year,” he said.

Imports of rice from Thailand, India and Brazil were significant last year, he said.

The 2020-21 upward revision for imports — all for long-grain — was largely based on strong purchases from Thailand, India and Brazil in August and expectations that U.S. purchases from these sellers will remain strong the remainder of the market year.

Most of Thailand’s sales in the U.S. are for aromatic Jasmine rice, although an LSU AgCenter Jasmine-type alternative, Jazzman, is available in the U.S. Much of the Indian import is for basmati rice.

Brazil regularly ships nonaromatic long-grain rice to the United States, mostly whole-grain white rice but also smaller quantities of broken-kernel rice for processed uses, Deliberto said.

Brazilian rice exports are occurring at an accelerated pace because that country’s currency has been devalued by 30%, he said, making Brazilian rice more competitive in the global market.

Deliberto said Brazil also has made strong sales in Africa and other Western Hemisphere countries because of Brazil’s devalued currency, the real.

“The market is weighing whether or not the exportable supplies from that country can satisfy foreign demand,” he said. “Interestingly, any potential shortfall in Brazilian exportable supply may force South American buyers turning to the U.S. for rice needs.”

In early September, the United States sold 30,000 tons of long-grain rough rice to Brazil, the first significant rice sale there since September 2010. Brazil is importing rice from the U.S. in the interim period to comply with the country’s import tariff exception status through the end of the calendar year.