Rice Crop To Hit Record, But Prices Still Rising
ITALY: May 13, 2008
MILAN - World rice output is expected to hit a record high this year, but
growing demand and export curbs should keep prices high, at least in the
short term, the United Nations' Food and Agriculture Organisation said on
Monday.
Rice prices have been surging as governments and importers rush to stock up,
spurred by growing fears the food staple will be in short supply.
"World paddy production in 2008 could grow by about 2.3 percent, reaching a
new record level of 666 million tonnes, according to our preliminary
forecasts," FAO rice expert Concepcion Calpe said in a statement on Monday.
Taken in milled terms, this year's rice output should rise to about 445
million tonnes, above FAO's previous estimate of 441 million tonnes and the
432 million tonnes forecast by the U.S Agriculture Department on Friday.
"For the first time, paddy production in Asia may surpass the 600 million
tonne benchmark this year, amounting to 605 million tonnes," Calpe said,
adding that major gains were expected all across the region.
In Africa, rice output is forecast to grow 3.6 percent to 23.2 million
tonnes in 2008, assuming normal rains in the coming months, while paddy
output in Latin America and the Caribbean is seen rising 7.4 percent to 26.2
million tonnes, the FAO said.
The output forecast is negative for Australia, the United States and Europe,
due to competition from other crops, the Rome-based agency said.
The current forecast may worsen due to the cyclone which hit Myanmar when
paddy farmers were harvesting their dry season crop accounting for 20
percent of annual production, Calpe said.
HIGH PRICES
Rice prices rallied about 76 percent between December 2007 and April 2008,
according to the FAO Rice Price Index, and they were expected to remain at
relatively high levels because stocks held by exporters were expected to be
reduced.
"Prices are expected to remain extremely firm, at least until the third
quarter of 2008, unless restrictions on exports are eased in the coming
months," Calpe said. "At the moment, only Thailand, Pakistan and the United
States, among leading exporters, are exporting rice without any
constraints."
World rice trade is forecast to drop about 7 percent to 28.8 million tonnes
in 2008, mostly due to export curbs, FAO said.
But even if the weather was favourable in the coming months and export
restrictions were lifted, prices were unlikely to return to the 2007 levels
as production costs surged on the back of rising fuel, fertilisers and
pesticides prices, FAO said.
World rice stocks are estimated at 105.2 million tonnes at the close of 2008
marketing seasons, which is slightly below the previous year's levels, FAO
said in a rice report.
World rice consumption is expected to rise 2 percent to 437 million tonnes
in milled terms in 2008, with 379 million tonnes expected to be consumed as
food. That means consumption per person would rise to 57.3 kg a year from 57
kg in 2007, the agency said.
(Editing by Peter Blackburn)
Story by Svetlana Kovalyova
REUTERS NEWS SERVICE
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