**Rice trade increasing due to strong import demands **
Bangkok, Thailand, 11 Nov 2011 -- Notwithstanding extensive floods in Asia since August, FAO has raised its July forecast of global paddy production in 2011 by 2.4 million tonnes to 721 million tonnes. The revision reflects expected improved rice harvests in Bangladesh, China, Egypt, India and Viet Nam which more than outweighed a worsening of prospects in Indonesia, the Republic of Korea, Madagascar, Myanmar, Pakistan, the Philippines and Thailand.
At the current forecast of 721 million tonnes (481 million tonnes, milled basis), world paddy production would be 3.0 percent larger than in 2010 and breach last year’s record.
Much of the growth mirrors progress in Asia, in spite of consecutive storms in the Philippines and severe inundations in Cambodia, Lao, Myanmar and Thailand, which marred crop prospects in those countries. The region is now anticipated to produce 651 million tonnes (435 million tonnes, milled basis), 3.0 percent above the already good 2010 outcome.
Forecasts of strong gains in both China and India are behind much of the expected growth, with Bangladesh, Pakistan and Viet Nam also anticipated to make sizeable contributions. On the other hand, Afghanistan, Indonesia, the Republic of Korea and Japan all garnered smaller crops this season.
FAO has raised production forecast in Africa to 26.0 million tonnes (3 percent more than in 2010) – largely based on improved prospects in Egypt and Western African countries. In Latin America and the Caribbean, the production outlook remains unchanged at around 29.6 million tonnes. In the other regions, abundant water boosted output in Australia and the Russian Federation harvested a bumper crop. By contrast, output in the United States looks set to fall to its lowest level since 1998, amid unfavourable weather.
International rice trade in 2011 is forecasted to increase by about 1 million tonnes to 34.3 million tonnes (milled basis), 9 percent more than in 2010 and an all time high.
The rice trade expansion is fuelled by strong import demand from Asia (Bangladesh, China, Indonesia and Iran) and Africa (Cote d’Ivoire, Madagascar, Mali, Nigeria and Senegal).
Much of the increase in demand is foreseen to be met by larger exports by Thailand and India. Abundant supplies also enabled Argentina, Australia, Brazil, Myanmar, Uruguay and Viet Nam to boost deliveries, while China, Egypt, Pakistan and the United States curbed theirs.
The outlook for international rice trade in 2012 points to a small decline in volumes to 33.8 million tonnes, driven by an expected weakening of demand next year.
As for 2012 exports, the drop would principally stem from lower deliveries by Thailand. Much of the shortfall in Thai deliveries is likely to be met by larger shipments from India. Australia, China, Pakistan and Viet Nam are also foreseen to raise exports next year, while Argentina, Brazil, Myanmar, the United States and Uruguay may witness a contraction.
Between June and September, international rice export prices continued to manifest strength on most market segments, influenced by reports of flood-related crop losses and, especially, by the announced high price policy in Thailand.
The FAO Rice Price Index passed from an average of 251 points in July to 260 in August and September before dropping to 255 in October. On an annual basis, international quotations over January-October averaged 13 percent above its corresponding value in 2010.
Prospects for prices in the coming months remain highly uncertain, although they will be very much influenced by the unfolding of crops to be harvested in the second quarter next year. However, policy developments, especially in Thailand and India, will continue to weigh heavily on the market.