The Hindu Business Line : Global rice stocks seen at 7-year high

The increase is in view of higher stocks in Asian countries. Globally, rice reserves this year will be sufficient to cover about three months of planned utilisation in 2009.

Our Bureau

Chennai, March 22 Global rice stocks carried over to the current annual year are projected to be at a seven-year high of 118 million tonnes (mt).

They are 9 mt higher than last year and highest since 2002, according to the Food and Agricultural Organisation (FAO).

Prices of rice, too, are expected to drop in view of the economic downturn but the decline may result in problems for the producers.

The stocks are also higher than forecasts made in July by the UN organisation.

The increase is in view of higher stocks in Asian countries such as Bangladesh (up 0.65 mt); China (5 mt); India (1.5 mt), Indonesia (0.2 mt); South Korea (0.31 mt); Pakistan (0.2 mt); Saudi Arabia (0.14 mt) and Vietnam (0.2 mt).

The FAO said all of the 9 mt increase in stocks is expected to be concentrated in developing nations, which are forecast to hold a carryover of 115 mt, up from 116 mt a year ago. Globally, rice reserves this year will be sufficient to cover 25.8 per cent or about three months of planned utilisation in 2009, up from 24.4 per cent in 2008.

“The higher value of the stock-to-use ratio is indicative of an improved level of security, as far as rice is concerned, at the world level, which does not preclude shortages at the national or sub-national levels,” FAO said in its Rice Monitor.

India’s output

Referring to India, the report said overall rice production in the country could touch a record 97.3 mt (147 mt in terms of paddy), up 1.6 per cent over 2008.

After a record kharif crop, India relaxed a few restrictions on rice exports last year.

It could boost exports from an estimated 3.7 mt in 2008 to 4 mt this year.

An interesting fact of rice consumption last year was that its utilisation increased 2.4 per cent to 438 mt with 379 mt consumed as food and the rest for feed and other uses.

Consumption trend

FAO said despite higher prices in 2008, average consumption was estimated to have increased to 57 kg a year from 56.9 kg in 2007. This reflected gains in the developing countries, where average consumption by a person was gauged at 68.7 kg in 2008 compared with 68.4 kg in 2007. In contrast, it was estimated to have fallen from 12.6 kg to 12.2 kg in the developed countries.

Based on production estimates of 2008, rice utilisation this year is expected to be 2.2 per cent higher at 448 mt. Rice consumption, as food, is projected to rise 1.8 per cent to 386 mt. Global per capita consumption is seen rising 0.5 per cent to 57.3 kg.

Prices on the decline

On the price front, FAO said the rates had been declining since hitting the peak in May last year. Still, rice prices ended 84 per cent higher in 2008 compared with 2007.

Rice prices continue to fall below the level witnessed a year ago, mainly due to various programmes being implemented in China, Thailand, Pakistan and Vietnam. These are also geared towards sustaining producer or export prices.

The maintenance of export restrictions in India and Egypt has also averted a more drastic drop in prices.

Such policies largely explain the resilience of international rice prices compared with world prices of other cereals, especially wheat, which have virtually returned to levels prevailing before prices started their surge in 2007.

World rice prices stabilising around current levels was questionable, FAO said, adding this year, the market would need to balance at lower prices.

Governments of rice-producing nations face greater challenges in stimulating production and keeping prices affordable to consumers.

The easing of world rice market conditions is expected to bring down prices but their access to rice supplies may not improve in the face of deteriorating incomes and rising job insecurity.

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