Regional Office for Asia and the Pacific

Rice production in 2004 is second highest on record but production is lower than consumption

Rice production in 2004 is second highest on record but production is lower than consumption

Thailand, 04 Apr 2005 -- Bangkok (Food and Agriculture Organization of the United Nations) - Global rice paddy production in 2004 is now estimated to be 605 million tonnes, a 3.8 percent increase over 2003, FAO said today.

If confirmed at that level, the 2004 rice harvest will be the second highest on record, according to the latest issue of FAO’s Rice Market Monitor (March 2005). However, rice production would, again, be insufficient to cover consumption.

Rice production
Most of the 2004 expansion is concentrated in China, Indonesia, Japan, Pakistan, the Philippines and Viet Nam. Egypt, Argentina, Brazil, Uruguay, the United States and the European Union are also estimated to have harvested more rice in 2004.

By contrast, floods and droughts impaired the paddy season in Bangladesh, Cambodia, India, Laos, Malaysia, Myanmar, Nepal, Sri Lanka and Thailand which are all set to experience a contraction. Production is also anticipated to fall in Central America, Ecuador, Guyana and Peru. Recovering from the extremely poor outcome in 2003, rice production in Australia remained well below the levels reached in 2002.

According to FAO’s first forecast, rice production in 2005 should further increase by a modest 1.5 percent to 614 million tones. This subdued outlook reflects the possible negative impacts of current drought problems also on the crops that will be planted later in the course of the year.

Rice inventories
World rice inventories at the close of the 2004/05 marketing seasons are estimated at 97 million tonnes, 6 million tonnes smaller than their opening levels, meaning that production in 2004 would be insufficient to cover consumption.

Most traditional exporters are estimated to dent their stockpiles in 2004. Also among importers inventories are likely to end lower.

Rice trade
Rice trade in 2005 is estimated at 25.8 million tonnes, representing a 3 percent fall from 2004 trade estimates of 26.5 million tonnes.

Much of the contraction reflects reduced exports by Thailand, but also lower sales from Australia, India, Guyana and Uruguay. By contrast, shipments from Argentina, Myanmar, Pakistan, the United States and Viet Nam are anticipated to rise. China’s rice exports are also foreseen to rebound somewhat.

Demand for rice imports in 2005 is estimated to remain strong in some of the major Asian markets, in particular Bangladesh, Indonesia and the Philippines, where concerns over possible supply scarcities are building up. A new trade regime and lower tariffs in the European Union is also foreseen to give way to a larger inflow of rice to the Community.

Purchases by China are expected to be smaller. However, for imports to be cut, the government might have to intervene again this year by releasing supplies from inventories.

Rice prices
World rice prices over the calendar 2004 rose to their highest level since 1998. International rice quotations continued to firm in December and January and have remained steady since then, despite the arrival of fresh rice supplies on the market.

Among the various categories, quotations of the high quality Indica rice rose by 20-30 percent compared to 2003. The rise was even stronger in the case of the lower quality Indica, while gains were more contained for Japonica and Aromatic rice.

RAP 05/13

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