The Hindu Business Line : Record rise in world rice output, trade expected

Mumbai April 27 World rice export prices that began their steady upward trend in December 2006 may soften somewhat in April and May following harvest of main 2007 crop in the southern hemisphere and secondary 2006 crop in the northern hemisphere. With arrivals of new supplies to the market, price sentiment will be somewhat damp till June.

However, the general price outlook is that the coming months will see continued price gains because of expectations of continued strong import demand and major origins (governments of Thailand, Vietnam and Cambodia) determined to ensure prices remain at remunerative levels, the Food and Agriculture Organisation (FAO) stated in its latest Rice Market Monitor.

Production front

On the production front, the first forecast of world production for 2007, although very tentative, points to 633 million tonnes of paddy, up 4 mt from previous year and matching the record achieved in 2005.

Much of the 2007 expected production gains are likely to come from Asia. Modest gains are foreseen among major producers China, India, Thailand and Vietnam.

FAO forecast of world rice trade in 2007 is now placed at 29.8 mt, up 1.2 mt from 2006, and almost matching the 2005 trade record. The anticipated rise in trade reflects greater supply needs by importing countries facing production shortfalls, while there is less pressure for trade expansion from an exporter perspective, given that major exporting countries may also face supply constraints, the report pointed out.

Indian paddy output

For 2006-07, Indian paddy production is estimated to have declined by 1.1 mt to 136.6 mt (91.05 mt milled rice). The year-on-year decline reflects expectations of a smaller secondary (rabi) crop, partly caused by a shift of land from rice to wheat cultivation following the stepping up of wheat support prices, FAO observed.

India's rice exports in 2007 are projected at 3.9 mt (3.8 mt). On the other hand, major rice importers in Asia are likely to be Indonesia (1.5 mt), the Philippines (1.7 mt) Bangladesh (1 mt), Iraq, Iran and Saudi Arabia (approximately 1.0 mt each).

The 2007 Indian paddy-planting season is set to begin in June. Crop progress and harvest size will depend almost entirely on the quantum and distribution of southwest monsoon rains.

The report referred to the growing concern in India, like in China, over the consequences of climate change for agricultural production and said that studies in the country looking at the impacts of climate change on rice production highlighted the negative long-term effect of a rise in temperature over the growing season, with an increase of one degree Celcius roughly estimated to lower paddy yields by 10 per cent.