30 Oct 2002 -- Bangkok ‑ With world rice consumption outpacing production, the 2002 global rice trade is set to cross the 25 million tonnes benchmark for the second time in history, the UN Food and Agriculture Organization (FAO) said in its latest rice market report released today.
Asia’s 2002 paddy crop is likely to fall to 535 million tonnes from 543 million tonnes last year, FAO forecasts in Rice Market Monitor – a reduction of 5 million tonnes since the previous estimate in August 2002. An expected decline of almost 10 million tonnes since last year in India’s paddy harvest caused by a prolonged erratic monsoon in 2002, could lower global production by nearly 9 million tonnes this year, predicts the report.
However, this is unlikely to affect the country’s strong export performance, forecast to account for nearly a fifth of the 2002 global rice trade of 25.7 million tonnes, up from just 7 percent in 2001. This will bring India close to the world’s top exporter, Thailand. Abundant surplus stocks held by the state agency Food Corporation of India (FCI) will enable India to export a record 5 million tonnes this year, 800 000 tonnes more than the previous August estimate and an increase of more than 250 percent over 2001.
The report has lowered its forecast for Thailand’s rice exports in 2002 by 500 000 tonnes to 7 million tonnes, based on reduced shipments in the first seven months of the calendar year. Thailand’s paddy output has been revised up by 2 million tonnes to 27 million tonnes, with expanded plantings under the second paddy crop expected to offset the losses to the early September floods.
The Rice Market Monitor shows Viet Nam, until 2001, the world’s second largest rice exporter, slipping to fourth place behind the United States, which is projected to export 100 000 tonnes more than Viet Nam’s estimated 3 million tonnes.
Taking note of Thailand’s initiative that led to the 9 October 2002 agreement among the world’s five main rice exporters to “stabilize” prices, exchange information and promote development endeavours, the FAO report cites the conditions for the success of such arrangements. It also notes the need for consistency with WTO terms, especially the requirement for “adequate participation of importing countries and tight safeguards for importers on prices and decision-taking powers, if the Agreement involves market intervention”.
Sales of high quality rice from Thai government reserves to exporters have led to prices of Thai 100 percent B declining by an average of US$12 per tonne from July to US$191 per tonne in September. Prices of the US counterpart long grain 2/4 percent climbed by US$12 over this period to US$215 per tonne in September, making this the first time since April 2002 when US rice quotations showed a premium over Thai 100 percent.
FAO projects that world rice trade will grow to 26.1 million tonnes next year, although this is subject to revision as several countries that could influence global trade have yet to harvest their crops.
World rice stocks are projected to slide to a 15-year low of 131 million tonnes in 2003 as global rice consumption is expected to grow faster than production for the third consecutive year. Most of the reduction is forecast in China and India.
Imports by the Democratic People’s Republic of Korea are forecast to increase by 100 000 tonnes over the previous year, following the resumption of rice aid shipments by the Republic of Korea.
The return of normal rains to Afghanistan after successive years of drought have led to a doubling of the paddy harvest forecast for the country.
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