Light monsoon rains force Cambodia to lower rice forecast

07-Aug-2012

The Food and Agricultural Organisation (FAO) of the United Nations lowered its forecast for global rice production yesterday due to light monsoon rains in India and other producers including Cambodia.

In a statement from Bangkok, the FAO said global paddy production was expected to total 724.5 million tonnes, down from the original forecast of 732.3 million tonnes in April.

"The downward revision was mainly the result of a 22 per cent lower-than-average monsoon rainfall in India through mid-July, which is likely to reduce output in the country this season," the statement said.

"Production forecasts were also reduced for Cambodia, the Chinese province of Taiwan, the Democratic People's Republic of Korea, the Republic of Korea and Nepal, all of which may see a production drop in 2012."

Despite the downward revision, "world output should still slightly surpass the excellent results achieved in 2011."

In contrast to trends in the international corn and wheat markets, "rice prices have remained surprisingly stable after gaining two per cent in May," the FAO said.

"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."

Countries expected to post production gains are China, Indonesia and Thailand along with several other countries in Asia which accounts for the lion's share of global output.

The FAO predicted Asia would reap 657 million tonnes in 2012, up 0.4 per cent from 2011.

Global rice trade in 2012, however, is expected to decline by one million tonnes to 34.2 million tonnes, "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 Vietnam also shipping less rice," the statement said.

The FAO said global rice inventories at the close of the 2012-2013 marketing years had been revised upward by 200,000 tonnes of milled rice to 164.5 million tonnes.

"This would imply a nine million tonnes increase from the previous year and mark the eighth consecutive season of stock accumulation.

"Thailand needs to release its abundant stocks before the October harvest, which could impact prices," it added.