The Hindu Business Line : World rice market to rule firm

SHRINKING TRADE: Paddy being winnowed after harvest on a farm near Thrissur, Kerala. Global rice production could shrink further this year but prospects for prices are buoyant. — K.K.Mustafah

Mumbai , Oct. 11

World rice trade in 2007 could shrink further (for the second year in a row) with lower import volumes forecast for Bangladesh, Iran and the Philippines.

World inventories are poised to expand and yet, international rice prices are expected to continue to remain on the rise over the coming months, according to Food and Agriculture Organisation (FAO).

Although import demand may weaken in the coming months — when northern hemisphere countries will harvest their main crops — price prospects remain buoyant as export supplies are expected to remain tight in major exporting countries at least until the first quarter of next year, FAO said in its latest Rice Market Monitor adding that a strong El Nino recurrence could further accentuate the price sentiment.

World Exports

Although highly tentative, rice trade in 2007 is currently forecast at 28.1 million tonnes (mt), down from 28.7 mt in 2006 and from the record 29.8 mt in 2005. Much of the decline in world exports is currently foreseen to result from smaller shipments by China, Pakistan, Egypt, the US and Australia.

In contrast, Cambodia, India and Thailand could export more. Exports of basmati rice from India might, however, be affected by a recent decision by exporters to establish a minimum export price level to prevent firms from undercutting each others' prices, the report added. FAO has forecast India's rice exports in 2007 at 3.6 mt, slightly more than 3.5 mt exported in 2006, but much below the record 5 mt exported in 2005. However, India's actual paddy production could less than 140 mt forecast by FAO.