Following downgrades for production of a number of staple grains around the world, including wheat from the global powerhouses of the European Union and China, maize in the United States and Central America and soy from the United States and South American giants, The UN Food and Agriculture Organisation today cut estimates for rice production in India.

The FAO said that below average monsoon rains in India are behind a 7.8 million tonne downward revision in its forecast for global rice paddy production in 2012. Monsoon rainfall in India has been 22 per cent lower than average this year and cotton production is also thought to have been affected. The FAO figures were published in the July 2012 issue of the Rice Market Monitor.

Due to the effects of the weaker monsoon weather, global paddy production is now expected to total 724.5 million tonnes (483.1 million tonnes milled), compared with the FAO’s April forecast of 732.3 million tonnes (488.2 million tonnes milled). As well as the 1 per cent reduction for Indian production, the world’s second largest rice producer, forecasts were also reduced for Cambodia, the Chinese Province of Taiwan, DPR Korea, the Republic of Korea and Nepal.

Following a 2 per cent rise in May, rice prices have remained “surprisingly” stable according to the FAO. This stands in stark contrast to maize and wheat prices, where production concerns have sparked market rallies which have resulted in record breaking prices and fears over access to food for the world’s poorest. Nevertheless, FAO said today, “Amid abundant rice supplies and stocks , the likelihood of a strong price rebound in coming months is minimal, but the future direction of rice prices remains uncertain.”

Production gains

Furthermore, some countries are expected to register production gains, including mainland China, Indonesia and Thailand. Production in Africa may increase by as much as 3 percent, while Australia's rice harvest was 32 percent higher than last year.

Prospects are also good for Bolivia, Colombia, Guyana, Peru and Venezuela in South America. However, due to shifting production patterns in the continents major agricultural players, rice production in South America and the Caribbean is forecast to drop by 7 per cent in 2012.

Globally, the rice trade is expected to decline by 1 million tonnes to 34.2 million tonnes in 2012, largely as a result of reduced import demand from Asian countries. Thailand is expected to face a sharp decline in exports, with Argentina, Brazil, China (Mainland), Myanmar, Uruguay and Viet Nam also shipping less rice.

Global rice inventories at the close of the 2012-2013 marketing years were revised upward by 200 000 tonnes to 164.5 million tonnes (milled basis). This would imply a 9 million tonnes increase from the previous year and mark the eighth consecutive season of stock accumulation. FAO said Thailand needs to release its abundant stocks before the October harvest, which could impact prices.

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