World rice production is expected to increase in 2008 by 12 million tones or 1.8 percent, assuming normal weather conditions, the UN Food and Agriculture Organization (FAO) said here on Wednesday.
Rice production increases would ease the current very tight supply situation in key rice producing countries, according to the first FAO forecast for this year.
International rice trade is expected to decrease, mainly due to restrictions in main exporting countries, FAO said.
Sizable production increases are expected in all the major Asian rice producing countries, especially Bangladesh, China, India, Indonesia, Myanmar, the Philippines and Thailand, where supply and demand are currently rather stretched. Governments in these countries have already announced a series of incentives to raise production.
Rice production outlook is also positive in Africa, where high world prices may sustain a 2 percent growth, particularly in Egypt, Guinea, Nigeria and Sierra Leone. Concerns about food import dependency in the region have led to a mobilization of resources towards the rice sector.
Rice production is expected to recover strongly in Latin America.
Rice production in the European Union is also expected to rise while it may contract in Japan, one of the few countries where producer prices fell last year, according to FAO.
"The international rice market is currently facing a particularly difficult situation with demand outstripping supply and substantial price increases," said FAO Senior Economist Concepcion Calpe.
"Higher rice production in 2008 could reduce the pressure, but short-term volatility will probably continue, given the very limited supplies available from stocks. This implies that the market may react very strongly to any good or bad news about crops or policies," she added.
According to the latest FAO estimates, paddy production rose by1 percent in 2007 to 650 million tones, which implies that it would be the second consecutive year where production growth would fall short of population growth, resulting in a drop of rice production on a per caput basis.
International trade in rice in 2008 is currently foreseen to reach 29.9 million tones, 1.1 million tones lower than the revised2007 trade estimate. The very tight supply situations that most exporting countries may face until the last quarter of the year and the associated restrictions on exports lay much behind the anticipated drop of rice trade in 2008, FAO said.
Since January 2008 international rice prices have seen a steep increase of about 20 percent, according to the FAO All Rice Price Index.
Source:Xinhua
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