Spanish rice production expected to falter as other EU states anticipate Indica expansions

Planting across the European continent all but concluded by the end of May, with dry weather concerns and expectations of shifts towards greater Indica production abounding in some markets.

Across the continent, output is expected to increase in 2021, with the US Department of Agriculture (USDA) projecting harvested area to expand by 0.7% on year to 423,000 hectares and milled rice production also to increase by 1.4% on year to 2 million mt. Most of the expansion in area is expected to be driven by Italian and Portuguese farmers.

Ahead of the start of planting operations in Italy, Ente Risi Nazionale (ENR) projected total planted area at 229,300 hectares, up by 0.9% on year. Initial indications suggested that 2021 round grain planted area will contract by 13% year on year to 58,700 hectares. At the same time, ENR also projected that Indica planted area will expand by 14% to 48,000 hectares.

However, with this survey taken in February before Indica reached its price highpoints amid continent-wide shortage concerns and with farmers yet to buy seeds, it is generally expected that the round grain decrease and Indica increases will likely be starker that what was initially projected. Approximately 20% year on year increases for the risotto varieties – Arborio and Carnaroli – are also anticipated.

While no major concerns were raised during planting, one major mill raised concerns about dry weather in April and a broker reported below-average temperatures and windy conditions causing problems and delays throughout. However, assuming a normal summer, this broker projected a start to the harvest around Sept. 20-25, only slightly delayed from the usual mid-September start.

While no official information was available in late May, a Portuguese mill reported that planting started early and "generally went quite well" amid favorable weather conditions. In 2020, the country suffered from water availability issues which constrained domestic production significantly. However, the mill stated that "most" of these issues have been resolved – "only a small area in the southern region had some minor restraints, but nothing relevant."

The Portuguese mill also noted that there is likely to be a "considerable" shift away from Japonica production due to the high prices farmers were able to achieve within Europe for Indica paddy this year. While Indica production in Portugal typically accounts for around 5% of total output, this source projected that between 20%-30% of planted area was Indica this year.

A Greek mill similarly reported that planting was ongoing in late May "but without problems." As in other countries, a shift towards greater Indica production is anticipated. The mill reported that this shift is "not so big, about 10%", with approximately 80% of the Greek crop still anticipated to comprise Japonica.

Despite reports of a broadly unchanged year-on year crop by the USDA, a major mill in the Spanish heartland of Seville reported that "the situation is really bad." In some areas in the region, water is only available to plant 30% of the crop and at best, the region will plant 50% of fields. While the region is more known for producing Indica than Japonica due to climactic conditions, the mill added that "almost 100% will be Puntal long [grain] rice."

A European broker agreed that reduced rainfall in recent months is likely to limit planting in the south of Spain, projecting that some areas would only plant 30%, but this could expand if rains pick up. The source added that the rest of the country will plant as normal, "just a bit late (about 20 days)," with no major shift in production around Seville or in Valencia between Japonica and Indica anticipated.

In Europe's four main rice producing countries, a mixed picture has emerged for planting. In all countries bar Spain, a substantial shift towards Indica production at the expense of Japonica has been reported – especially for Portugal and Italy. And while some planting inconveniences have been reported in other countries, it is only Spain in which major production decreases could be recorded, specifically in the south of the country. However, with three months until the start of harvesting on the continent, there is a lot of time for fortunes to change.