The Hindu Business Line : FAO sees drop in global rice trade

World rice market, largely dominated by Asian countries as producers, consumers, exporters and importers, is waiting for clear direction after prices firmed since April following tightening supplies and steady import demand.

Rice prices are expected to remain strong at least until September when crop conditions in major Asian origins would have crystallised and harvest begun.

Over the next two months there could also be uncertainties relating to progress of rainfall and crop conditions.

Players are also watching developments in the import programme of major consuming countries — the Philippines and Indonesia — which could also exert some effect on market prices.

Global rice trade in 2006 is forecast by the Food and Agriculture Organisation (FAO) at 28.5 million tonnes, 1.3 mt or 4 per cent lower than last year. A more buoyant expectation of exports from countries such as India and Pakistan may be neutralised by Thailand's deteriorating prospects following strengthening of the local currency against the US dollar.

India's rice exports in 2006 are seen declining to 4.4 mt following erosion of price competitiveness vis-à-vis competitors like Pakistan and Vietnam at least in the first half of the year. In 2005, India exported a record 5.3 mt of rice.

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