FAO forecasts record rice harvests in 2011, rice trade increasing

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BANGKOK, Nov 11 – Despite extensive floods in Asia since August, the United Nations Food and Agriculture Organization (FAO) has raised its July forecast for global paddy production this year by 2.4 million tonnes to 721 million tonnes.

The agency said the revision reflects expected improved rice harvests in Bangladesh, China, Egypt, India and Viet Nam which more than outweighed a worsening of prospects in Indonesia, the Republic of Korea, Madagascar, Myanmar, Pakistan, the Philippines and Thailand.

At the current forecast of 721 million tonnes (481 million tonnes, milled basis), world paddy production would be 3 per cent larger than in 2010 and surpass last year’s record.

Much of the growth mirrors progress in Asia, in spite of consecutive storms in the Philippines and severe floods in Cambodia, the Lao PDR, Myanmar and Thailand, which marred crop prospects in those countries. The region is now anticipated to produce 651 million tonnes (435 million tonnes, milled basis), 3 per cent above the already good 2010 outcome.

Forecasts of strong gains in both China and India are behind much of the expected growth, with Bangladesh, Pakistan and Viet Nam also expected to make sizeable contributions. On the other hand, Afghanistan, Indonesia, the Republic of Korea and Japan all achieved smaller crops this season.

FAO has raised its production forecast in Africa to 26.0 million tonnes (3 per cent more than in 2010) – largely based on improved prospects in Egypt and Western African countries. In Latin America and the Caribbean, the production outlook remains unchanged at 29.6 million tonnes. In the other regions, abundant water boosted output in Australia and the Russian Federation harvested a bumper crop. By contrast, output in the United States looks set to fall to its lowest level since 1998, due to unfavourable weather.

The international rice trade in 2011 is forecast to increase by about 1 million tonnes to 34.3 million tonnes (on a milled basis), 9 per cent more than in 2010 and an all time high.

The rice trade expansion is fuelled by strong import demand from Asia (Bangladesh, China, Indonesia and Iran) and Africa (Cote d’Ivoire, Madagascar, Mali, Nigeria and Senegal).

Much of the increased demand was expected to be met by larger exports by Thailand and India. Abundant supplies also enabled Argentina, Australia, Brazil, Myanmar, Uruguay and Viet Nam to boost deliveries, while China, Egypt, Pakistan and the United States curbed theirs.

The outlook for the international rice trade in 2012 points to a small decline in volume to 33.8 million tonnes, driven by an expected weakening of demand next year.

As for 2012 exports, the drop would principally stem from lower deliveries by Thailand.

Much of the shortfall in Thai deliveries is likely to be met by larger shipments from India. Australia, China, Pakistan and Viet Nam are also foreseen to raise exports next year, while Argentina, Brazil, Myanmar, the United States and Uruguay may witness a contraction.

Between June and September, international rice export prices continued to manifest strength on most market segments, influenced by reports of flood-related crop losses and, especially, by the announced high price policy in Thailand.

Prospects for prices in the coming months remain highly uncertain, although they will be very much influenced by the unfolding of crops to be harvested in the second quarter next year. However, policy developments, especially in Thailand and India, will continue to weigh heavily on the market.