14 Nov 2003 -- Bangkok - World rice inventories at the close of the present crop seasons ending in 2004 are now forecast at 102 million tons, down 20 million from their opening level. As market conditions remain tight, rice prices are expected to continue a steady recovery from last year low levels.
For the fourth consecutive year, global rice stocks are predicted to fall, as consumption is again outpacing production worldwide. The November 2003 issue of FAO’s Rice Market Monitor now forecasts world rice stocks to stand at 102 million tonnes, down 20 million tonnes from their opening level at the beginning of this year’s crop season.
Developments in China and India continue to be the major factor underlying the worsening of the global stock situation. In China, the deterioration of the production outlook for 2003 means that large rice supplies would need to be released from inventories (stocks down by 17 million to 61 million tonnes) to meet domestic requirements. India might also record a 2 million tonne drop in stocks, the lowest level in a decade, despite a recovery in the production and an expected fall in exports next year. Sizeable reductions are also attributed to Japan and the Republic of Korea, where the poor crops this season will need to be supplemented by supplies from their stockpile. By contrast, carry-over stocks could increase from their opening level in Bangladesh, Myanmar, Thailand and Viet Nam, a reflection of the good 2003 crops they are expected to harvest.
International rice prices have continued to strengthen since mid 2003 for all rice categories, except for the lower quality Indica rice. The rally was most pronounced for the Japonica and Aromatic rice. The FAO Japonica price index trended upward, moving from 84 in August to 94 in October, reflecting the opening of several import tenders by Japan and the Republic of Korea. The Aromatic rice price index strengthened by two points during this same period, reflecting an increase of US$10 per tonne for the India Basmati and US$15 for the Thai fragrant rice.
The price outlook for the next few months continues to be positive as current prospects confirm a tightening of market conditions. In this connection, the Council for Rice Trade Cooperation – composed of China, India, Pakistan, Thailand and Viet Nam – is to meet soon to discuss and exchange information on rice market prospects and possibly decide on a common export reference price.
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