Mainland rice glut expected
From staff and wire reports
to bring lower isle pricesA record rice crop on the mainland is expected to lead to lower retail rice prices in Hawaii later this year, a representative for a rice manufacturer says.
But just how much lower won't become clear until probably October at the earliest, after the harvesting of the current crop begins, said Harrison Wong, president of HH Sales & Marketing, local broker for Diamond Head G Rice.
The federal government said yesterday that U.S. farmers planted almost 8 percent more rice this year than a year ago.
In the Mississippi Delta region, where most of the nation's rice is grown, a beneficial mix of warm, sunny days and cool nights is keeping farmers on track for a record crop.
Most of Hawaii's rice comes from California, where farmers also are expecting a bountiful harvest.
That would contrast with last year's harvest, which produced below-normal yields. As a result, rice manufacturers the past few months have seen their inventories dwindle, leading to higher retail prices.
Wong said Hawaii prices have gone up about 15 percent the past few months.
The expectation that U.S. farmers will harvest a record crop pushed rice futures down 3 percent yesterday to a five-year low on commodities markets.
"Buyers are backing away because they realize the crop is going to be plentiful," said Neauman Coleman, a rice analyst with Morgan Stanley Dean Witter in Memphis, Tenn. "There are no weather complications for rice at the moment."
Rice for September delivery fell 0.2 cent, or 3.2 percent, to 6 cents a pound on the Chicago Board of Trade, the lowest closing price for a most-active contract since October 1994. Prices are 36 percent lower than a year ago.
Assuming normal weather, U.S. rice production could reach a record 6.89 million metric tons, up from 6.76 million, the U.S. Department of Agriculture said. That could leave stockpiles at the end of the 2000 crop year at 1.81 million metric tons, from 1.01 million a year earlier, the USDA said.
Star-Bulletin reporter Rob Perez and
Bloomberg News contributed to this report.
