FAO Rice Market Monitor, April 2013, Volume XVI - Issue No. 2
The latest FAO estimate of global paddy production in 2012 has been lifted by almost 1 million tonnes since January, largely on account of India, Myanmar and Madagascar, and in spite of downward revisions of production in Bangladesh, Mali, Pakistan, Sri Lanka and Thailand. At 731.2 million tonnes (487.5 million tonnes, milled basis), the 2012 new world production aggregate would be slightly above the record achieved in 2011, the estimate of which was also raised by 3 million tonnes following the release of new official figures. With the 2012 season about to conclude, the market attention is shifting to the 2013 paddy season, the plantings of which are starting or in progress in Northern Hemisphere countries. Still tentatively, and assuming a return to a more normal weather pattern, FAO foresees production in the forthcoming 2013 season to rise to 746.7 million tonnes (497.7 million tonnes, milled), 2.1 percent, some 16 million tonnes, more than in 2012.
The relatively modest 2012 world production performance reflects the outcome of the season in Asia, where 662.9 million were harvested, only 3.4 million tonnes more than in 2011. The increase was fuelled by large gains in China, Indonesia, the Philippines, Thailand and Viet Nam, which more than compensated for output shortfalls in India, Nepal and Pakistan, largely caused by unfavourable weather. Assuming more regular climatic conditions, Asian production in 2013, could rise by 2.2 percent, or 15 million tonnes, to 677.5 million tonnes (451.7 million tonnes). At this preliminary stage, virtually all producing countries in the region are anticipated to harvest larger crops, with both India and Indonesia heading to increases of more than 3 million tonnes each. In Africa, the 2012 production forecast has been slightly heightened to reflect more buoyant estimates in Madagascar. Production in the region is now gauged at 26.6 million tonnes, 5 percent more than in 2011. Much of the gain originated in Egypt, Guinea, Madagascar, Mali and Senegal, while output fell in Nigeria and Tanzania. In 2013, 27.7 million tonnes of paddy are expected to be harvested in the region, 3.9 percent more than in 2012, with the largest absolute gains expected in Egypt, Mali, Nigeria and Tanzania. However, prospects are negative for Madagascar where the 2013 main crops are already at an advanced growing stage. In Latin America and the Caribbean, production contracted by almost 7 percent to 27.3 million tonnes in 2012, following weather and price-induced reductions in Argentina, Brazil, Ecuador and Uruguay. While production in the region may witness a small rebound to 27.7 million tonnes in 2013, it is expected to remain well short of the 2011 record. In the other regions, output in 2012 rose by 30 percent in Australia and by 8 percent in the United States, but stagnated in the EU. Prospects for 2013 are positive for Australia, but remain downbeat in the United States and the EU, reflecting unattractive price expectations.
FAO has raised its January estimates of international rice trade in 2012 by 800 000 tonnes to 38.6 million tonnes (milled basis) and in 2013 by 500 000 tonnes to 37.4 million tonnes. The 2013 upward revision mainly stemmed from larger than previously forecast imports by Indonesia, Nepal, Nigeria and Senegal, and, on the export side, by larger than previously forecast deliveries by India and Viet Nam. Compared to last year, imports by China, Indonesia, Nigeria and Senegal are anticipated to retreat the most in absolute terms, while purchases by the Republic of Korea may rebound. Most of the expected contraction of trade in 2013 would be associated with sharply reduced sales from India, to a level still keeping the country among the leading suppliers, but also from Brazil. Part of these shortfalls is to be covered through increased exports from Egypt, Thailand and the United States.
Global rice utilization in 2012/13 is predicted to rise by 1.8 percent to 478 million tonnes, with per caput food consumption averaging 56.9 kg in 2012/13, 0.7 percent more than the previous year. Consumer prices have been rather stable in the past three months, but, compared to last year, have drifted higher in several Asian countries, especially India and Myanmar, while they have tended to decline in Eastern Africa.
FAO's forecast of global rice carryover stocks at the close of marketing years ending in 2013 have been lifted to 171.8 million tonnes since last RMM issue. At that level, inventories would be 6 percent larger than their opening level, lifting the world stock-to-use ratio from 33.9 percent in 2012 to 34.9 percent this year. The January estimate of stocks to be carried-in by the five major rice exporting countries (India, Pakistan, Thailand, United States and Viet Nam) to the next 2013 season has been cut down amid expectation of a reduced secondary crop in Thailand. Compared to 2012, the five countries' stocks are nonetheless forecast to end 4 percent larger, lifting the exporters' stocks-to-disappearance ratio from 25.2 percent in 2012 to 25.7 percent in 2013.
International rice prices have been stable in the past four months, with the FAO All Rice Price Index (2002-04=100) averaging 240 points in April 2013, unchanged from a revised January value. Across the various qualities and types, fragrant rice varieties were priced 7 percent higher than in January, reflecting tighter supply availabilities amidst strong buying interest, which contrasted with a continuing slide of Japonica prices amidst accrued competition among suppliers. Prices in the other rice segments were more stable, with the lower quality Indica index gaining 1 point and the higher quality Indica subsiding 2 points since January. Seen from an origin perspective, Thai quotations have weakened since January, on the arrival of new crop supplies, in spite of continued government purchases under the pledging programme. The large public stocks held in Thailand also weighed on market sentiment, prompting competing Viet Nam to lower its own prices, ahead of a possible offloading of large volumes of Thai rice on world markets. By contrast, prices showed a tendency to strengthen in India and Pakistan, especially for Basmati rice but also for the non-fragrant varieties. Limited availabilities also sustained long-grain quotations in the United States and in South America. In the next few months, the market attention is likely to focus on the Thai government decisions regarding the possible release of stocks, but also on India, where the widening of the rice distribution system, may have an impact on export availabilities and prices.