Regional Office for Asia and the Pacific

International rice prices increasing - 2010 harvest expected to be highest on record

Bangkok, Thailand, 30 Nov 2010 -- In its latest outlook released today, FAO gives a less optimistic forecast of global rice production than it did last June, as, since then, crops in many large producing countries have been affected by a series of problems. This has led the organization to lower its forecasts for production, especially for India, Pakistan, China and the Republic of Korea.

In spite of the downward revisions, FAO’s forecast of world paddy production for the 2010 season stands at 697.9 million tones (465.4 million tonnes, milled basis), two percent above the 2009 harvest and the highest rice harvest on record.

Asia accounts for much of the output growth, although the outlook is also favourable in Africa and North America.

Production growth is driven largely by an expansion in rice plantings to 160.7 million hectares.

Rice prices
The FAO All Rice Price Index averaged 260 points in November, up from a June value of 210.

Despite relatively low international quotations for rice during the first half of 2010, prices have continued to gain ground since June in all rice segments, but particularly for the lower quality Indica market.

Key to further price developments over the next months will be the forceful return of important buyers to the market, and – on the export side – the release of government reserves in Thailand and policies in Viet Nam and India.

Price developments in other cereal markets, mainly wheat and maize, will also need to be closely watched.

Rice production
The outlook for Asia suggests an increase of three percent above the 2009 poor harvest, reaching records levels this year (631.4 million tonnes) despite deteriorating prospects since the onset of the planting season.

Dramatic floods wiped out large tracks of maturing rice tracts in Pakistan last August, and production was trimmed for Cambodia, South Korea, Lao DPR, Myanmar and Thailand, all of which faced setbacks.

Overall rice production in Thailand is now estimated at 31.0 million tonnes, or one percent below the 2009 harvest.

Production in Africa is projected at 24.6 million tonnes, one percent more than in 2009 with significant gains in western Africa, Madagascar and Tanzania. Production in Latin America and the Caribbean contracted by six percent to 26.5 million tonnes.

2010 rice trade six percent higher than last year
Greater import demand from Asian countries (Bangladesh, China, Indonesia, Nepal, Philippines, Sri Lanka and Viet Nam) is behind much of the expected expansion in world rice trade to 31.0 million tonnes in 2010.

This expansion in rice trade will be met by considerably larger exports by Viet Nam and the US, while Thailand may keep rice exports close to last year’s level.

Looking ahead at 2011, FAO forecasts global rice trade to drop by two percent to 30.5 million tonnes (milled basis) – as several major exporters are anticipated to face supply constraints next year, especially Pakistan, but also Cambodia, Egypt and Viet Nam.

As for major importers, larger supplies may enable Bangladesh, Brazil, Nigeria and the Philippines to reduce their imports next year.

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