FAO Rice Market Monitor, January 2013, Volume XVI - Issue No. 1



• Since November 2012, FAO has raised its forecast of global paddy production in 2012 by about 1.5 million tonnes to 730 million tonnes (487 million tonnes, milled). With the season approaching conclusion, many of the revisions tracked new assessments of harvested or standing crops by governments. The scaling up of production mainly concerned Asian countries, in particular Cambodia, Indonesia, Thailand and Viet Nam, but also western African States, such as Guinea, Mali and Senegal. By contrast, prospects deteriorated in Bangladesh, China, the Rep. of Korea, and Nepal, and, outside Asia, Nigeria, Sierra Leone, the Russian Federation, Tanzania and Venezuela. At the forecast 730 million tonnes, 2012 world production would surpass last year’s record, but by barely 0.8 percent, or 5.7 million tonnes, which compares with seasonal increases of 20 million tonnes in 2010 and 22 million tonnes in 2011. All of the 2012 output gain would arise from an expanded area to 163 million ha, as yields are predicted to stay at 4.48 tonne per ha. The rather sluggish production growth currently anticipated mainly mirrors the negative outcomes of crops in Brazil and India, which suffered from unfavourable weather. In Asia, paddy output is projected at 662 million tonnes (442 million tonnes, milled), 0.9 percent higher than in 2011. Virtually all countries in the region are forecast to register gains, except India, the Rep. of Korea, Nepal and Turkey, which are expected to face a contraction, but also Bangladesh and Myanmar, whose outputs are seen to stagnate. In Africa, generally good crops in the northern and western sub-regions have supported an expected 4 percent increase to 26.4 million tonnes (17.4 million tonnes, milled) in 2012, spearheaded by large gains in Egypt, Guinea, Mali, Senegal and Sierra Leone and despite severe weather-related drops in Madagascar, Nigeria and Tanzania. In Latin America and the Caribbean, the 2012 season is estimated to have ended with a 6 percent decline, mainly caused by shortfalls in Argentina, Brazil, Ecuador and Uruguay. In the other regions, output in 2012 rose sharply in Australia and the United States but declined in the EU.

• Meanwhile, the 2013 paddy season has been launched along and south of the equator. The preliminary outlook for production in 2013 is positive in Indonesia, despite some early rainfall deficits and subsequent floods, with government targeting a 4.5 percent growth. In Sri Lanka, plantings of the main 2013 crop have been first constrained by drought and subsequently by floods. In Southern America, there has been little or no recovery of plantings, amidst rising production costs, but, unlike in 2012, weather conditions have been favourable so far. In Australia, the area under rice expanded by over 12 percent, although extreme heat is raising concern over yields. In Southern Africa, prospects for 2013 crops remain uncertain, as much of the sub-region witnessed a late arrival and erratic progress of the seasonal rains.

• FAO has lowered its November forecast of international rice trade in 2013 by about 600 000 tonnes, to 37.0 million tonnes (milled basis). Despite the revision, world rice trade in 2013 is forecast to trail only 2.2 percent behind the 2012 record. Among the main countries now expected to cut imports from last year are China, Indonesia, the Islamic Rep. of Iran, Nigeria, the Philippines, Senegal and Thailand. By contrast, Bangladesh, the Rep. of Korea and Nepal may buy more. As for exporters, lower shipments by India and Viet Nam, but also by Argentina, Brazil and Uruguay would be only partly compensated by increased deliveries by Cambodia, Egypt, Pakistan, Thailand and the United States. Based on current expectations, in 2013, Thailand is foreseen to recover its position as leading rice exporter, ahead of India and Viet Nam, but only by a small margin.

• Global rice utilization in 2012/13 is predicted to rise by 1.5 percent to 476 million tonnes, 1 million tonnes more than last anticipated. The bulk, or 85 percent, is to be consumed as food with per capita food intake up from 56.7 kg in 2011/12 to 56.9 kg in 2012/13. This increase would be facilitated in countries such as Bangladesh by declining domestic prices from last year, although, by-and-large, rice consumer prices continue to stand higher year-on-year in nominal terms.

• With global production now foreseen to exceed consumption by 11 million tonnes, these supplies are estimated to be added to inventories, which would boost global rice carryover stocks to 171 million tonnes in 2013, with particular large increase expected for China. As a result, the global stock-to-use ratio is estimated to rise from 33.6 percent in 2012 to 35.2 percent in 2013. Among the five leading exporters, Thailand and Viet Nam are projected to end the season with larger inventories, while India, Pakistan and the United States may face a contraction. As a group, however, the five countries' stocks would cover 27.8 percent of projected disappearance (domestic use plus exports) in 2013, up from 25.7 percent in 2012.

• Coinciding with the arrival to the market of the main paddy crops in major northern-hemisphere exporting countries, international rice prices have retreated since October 2012, bringing the FAO All Rice Price Index (2002-04=100) down by 3.3 percent to 236 points in January 2013. The weakness was especially marked for Japonica and Indica rice varieties, while strong demand sustained aromatic rice quotations. According to the index, prices in calendar 2012 averaged 238 points, 5 percent less than in 2011. Prices of Japonica rice varieties subsided most, by nearly 10 percent, amidst accrued competition from the USA, Australia, Egypt and the Russian Federation. Price slides in the other rice segments were more contained. Seen from an origin perspective, prices in South America and in Thailand strengthened compared with 2011, counter to the general 2012 falling tendency. In Thailand, the strength was, again, the reflection of the rice pledging programme, which kept supporting domestic and export prices by keeping million tonnes of rice away from the market and in public stocks. Export prices in South America also moved up in 2012, reflecting thin supplies along with rising costs. In most other exporting countries, 2012 rice quotations averaged lower than in 2011, with particularly pronounced declines witnessed in Pakistan and Viet Nam. The price slide was more contained in India.