Outlook and review of sectoral Policy changes
The latest market assessments and short-term forecasts for rice are presented in the quarterly “FAO Rice Market Monitor”, in the bi-annual “Food Outlook” and the bi-monthly “Crop Prospects and Food Situation”. Medium term projections are available in the jointly produced OECD-FAO Agricultural Outlook. On the other hand, developments in government rice policies are reported in the “Review of Basic Food Policies”.
September 2009 Rice Market Monitor
FAO’s June forecast of global paddy production in 2009 has been downgraded by 21.3 million tonnes to 668 million tonnes, which would be 3 percent less than in 2008. Much of the revision reflects unfavourable climatic conditions in northern hemisphere Asian countries, which are about to harvest their main 2009 paddy crops. Despite the anticipated decline, production in 2009 would still be high, second only to the record hit in 2008.
June 2009 Food Outlook
International rice prices have followed contrasting movements since November 2008, with the widely traded Indica rice varieties incurring steep falls, while Japonica rice prices continued to be supported by prospects of tight supplies. In general, rice prices have yet to fall back to 2007 levels, despite relatively large market availabilities arising from bumper crops in 2008. Much of the price rigidity reflects policies of major exporting countries, either in the form of producer price support or export curbs, which are reducing the volumes of rice flowing to world markets. International trade in rice may recover somewhat in 2009, as less prohibitive prices are expected to stimulate imports, especially in Asia, Europe, North America and South America. The increase would also be facilitated by a continuing easing of export restrictions. The bumper crops harvested in 2008 and favourable production prospects in 2009 are expected to allow for an increase in overall rice consumption in 2009, but also for a build up of 2009 global rice inventories, which may reach their highest level since 2002.
April 2009 Crop Prospects and Food Situation
High food prices persist in developing countries despite an improved global cereal supply situation and sharp decline in international prices. This is affecting access to food of large numbers of low-income vulnerable populations.
Rice Policies: 2003-2004
Global paddy production fell in 2002 to its lowest level since 1996, reflecting adverse weather conditions in several important producing countries. Although rebounding, production still fell short of consumption in 2003 and 2004, resulting in depleted world rice inventories. Reduced stocks along with a brisk demand for imports sustained world prices, which started recovering by mid-2003 after four years of decline. The international market therefore changed radically, passing from a situation of relatively ample supplies and falling prices in 2002 to a sudden tightening by mid-2003. In 2004, the surging world prices and freight rates started to be felt sharply in some domestic markets, putting pressure on governments to sustain production or to take action through direct price controls and border measures to lessen the impact on consumers.
On the policy front, the international scene has been dominated since 2000 by discussions over the modalities that will govern the process of liberalization of agriculture in the forthcoming WTO Multilateral Trade Negotiations. Meanwhile, developing countries were still implementing the commitments taken under the Uruguay Round agreement, a process due for completion by end-2004. A number of governments, however, went beyond such commitments and moved forward to further align their national rice policies along the basic WTO principles, by increasingly shifting support to the rice sector away from market distorting measures (classified as amber box), towards production controlled (classified as blue box) and minimally trade-distorting (classified as green box) measures.
