Regional Office for Asia and the Pacific

India to displace Viet Nam as world’s second biggest rice exporter after Thailand

20 Jun 2002 -- Bangkok, 20 June 2002 (Food and Agriculture Organization) – Competitive prices, timely monsoon rains and surplus stocks have set India on course to become the world’s second largest rice exporter this year after Thailand, the UN’s Food and Agriculture Organization (FAO) said in a new global rice market report released here today.

Lower export prices coupled with yet another anticipated bumper paddy harvest and the expected surge in imports by Indonesia and China, will enable the South Asian nation to displace Viet Nam as the number two rice exporting nation, FAO’s Rice Market Monitor forecasts. Despite a projected decline of nearly 2 million tonnes in the 2002 paddy harvest, India is estimated to more than double its previous year exports to 3.6 million tonnes in 2002, says the report.

According to latest information available from international rice brokers, rice merchants and national sources, Indian 25% rice was traded at US$132 per tonne in the international market. This was US$45 cheaper than its nearest competitor, Thai rice. The Indian export rice variety, India PR 106 25%, traded at almost half its last year’s price, in contrast to the sharp increase in the export prices of rice from the other nations.

International rice prices have shown “unusual strength” in May 2002, due largely to the continuing government procurement programme in Thailand and tightening supplies in Pakistan and Viet Nam. The rise has also been sustained by fears that current tensions between India and Pakistan could disrupt world supplies, says the FAO report.

Thailand is set to surpass its record 2001 export by 100 000 tonnes, shipping some 7.6 million tonnes
in 2002 despite a decline in paddy production estimated at 24.6 million tonnes, against 25.3 million tonnes last year. Superior quality Thai rice is trading at much higher prices, with the Thai 100% B surpassing the US$200 per tonne benchmark for the first time in two years.

Viet Nam is estimated to maintain its export level at 3.5 million tonnes – the same as in 2000 and 2001. Overseas sales by the other main exporters – China and Pakistan – are expected to drop sharply by 400 000 and nearly 1 million tonnes respectively.

Declining Chinese exports over the past two years parallel the continuing slump in national rice production which plunged sharply in 2001. The 2002 paddy harvest in the world’s biggest rice producer is estimated to be 400 000 tonnes less than the 178.7 million tonnes last year.

FAO has revised upward rice production estimates for Asia following expectations of timely arrival of monsoon rains and latest predictions of a much weaker ‘El Nino’ than forecast earlier this year. “While the possibility of another El Nino still looms over production prospects in a number of countries, specialised climate centres recently predicted a slow evolution toward el Nino conditions by the end of the year that would feature much weaker impacts than experienced in 1997-98,” notes the FAO report.

As a result, current estimates for the 2002 paddy harvest are higher than those released in May 2002 for Cambodia (4.3 million tonnes), India (134 million tonnes) and Myanmar (21 million tonnes). In Thailand, while recent abundant rains have allayed fears of a severe El Nino, “some weather disruptions over the course of the paddy season are still anticipated, which could depress output somewhat”, says the FAO report.

However, fears of adverse weather have led the Government of Indonesia to double its rice import requirements in 2002 to 3 million tonnes over last year.

RAP 02/27

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