Rice is a grain that is cultivated on every continent except Antarctica and is the primary food for half the people in the world. Rice cultivation probably originated as early as 10,000 BC in Asia. Rice is grown at varying altitudes (sea level to about 3,000 meters), in varying climates (tropical to temperate), and on dry to flooded land. The growth duration of rice plants is 3-6 months, depending on variety and growing conditions. Rice is harvested by hand in developing countries or by combines in industrialized countries. Asian countries produce about 90% of rice grown worldwide. Rough rice futures and options are traded on the Chicago Board of Trade (CBOT).

Prices – Rough rice prices on the CBOT nearest futures chart started 2003 near per 100 pounds (cwt or hundredweight). Prices then rallied fairly steadily during the year, more than doubling in price to hit a 5-year high of by the end of the year. Bullish factors centered on strong consumption, a sharp drawdown in stocks, and the weak dollar.

Supply – World rice production in 2003/4 was forecasted to rise to 391.023 million metric tons, up 2.8% from 380.263 million in 2002/3. World ending stocks in 2003/4 are forecasted at 83.997 million metric tons, down sharply from 106.901 million in 2002/3. The world’s largest rice producers in 2002/3 were China with 122.180 million metric tons of production (accounting for 32% of world production), followed by Indian (75.700 million or 20%), and Indonesia (33.411 million or 9%). US rice production in 2003/4 was forecast at 6.324 million metric tons, down 3.2% from 6.536 million in 2002/3 and accounting for only about 2% of world production.

Demand – World rice consumption in 2003/4 was forecast to rise to 413.927 million metric tons, up 0.9% from 410.132 million in 2002/3. Consumption in 2003/4 was forecast to exceed production for the third consecutive year, a factor that has led to the sharp drawdown in stocks and the sharp rise in rice prices. US rice consumption in 2003/4 was forecast to rise to 3.853 million metric tons, up 9% from 3.535 million in 2002/3.

Trade – Rice is generally consumed where it is produced, with only about 6% of world rice production moving into world trade. World rice trade in 2003/4 was forecast to fall to 24.737 million metric downs, down 9% from 27.316 million in 2002/3. The world’s largest rice exporters in 2002/3 were Thailand (representing 27% of total world exports), India (16%), the US (14.1%), and Vietnam (13.9%). US exports in 2003/4 are forecasted to fall to 3.000 million metric tons from 3.850 million in 2002/3. There are many nations that import rice, the largest being Indonesia, Philippines, Nigeria, and Brazil.