FAO: Rice Trading Fall in 2012 because Weaken Demand

Rice trade should fall slightly in 2012, because of weakening demand as well as lower exports from flood-hit Thailand, according to the Food and Agriculture Organisation (FAO). In a statement released yesterday, the United Nations agency said trade volume next year could fall to 33.8 million tonnes, from 34.3 million forecast for this year.

Rice trade in 2011 is forecast to increase by about 1 million tonnes to 34.3 million tonnes (milled basis), 9 per cent more than in 2010 and an all-time high. The expansion is fuelled by strong import demand from Asia (Bangladesh, China, Indonesia and Iran) and Africa (Ivory Coast, Madagascar, Mali, Nigeria and Senegal).

Supplies will come mainly from Thailand and India. Abundant supplies also enabled Argentina, Australia, Brazil, Burma, Uruguay and Vietnam to boost deliveries, while China, Egypt, Pakistan and the United States curbed theirs. It noted that much of the shortfall in Thai deliveries was likely to be made up by larger shipments from India. Australia, China, Pakistan and Vietnam are also foreseen to increase rice exports next year, while Argentina, Brazil, Burma, the United States and Uruguay may witness a contraction.

Between June and September 2011, rice prices in most market segments increased, 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.

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.

Despite extensive floods in Asia since August, the 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 Vietnam, which more than outweighed a worsening of prospects in Indonesia, South Korea, Madagascar, Burma, Pakistan, the Philippines and Thailand.

At the current rice forecast of 721 million tonnes (481 million tonnes, milled basis), world paddy production would be 3 per cent 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, Laos, Burma and Thailand, which marred crop prospects in these countries. The region is now anticipated to produce 651 million tonnes (435 million tonnes, milled basis), 3.0 per cent above the already good 2010 outcome.

Category: current rice forecast, Rice, rice demand, rice forecast 2012, rice prices 2012, rice trading