Less rice to be traded this year

International trade in rice is anticipated to drop by nearly 9 per cent in 2004 following reduced sales by China and India. Rice prices, which staged a remarkable recovery in 2003, are expected to remain firm for some more time.

Global rice production is likely to rise marginally by about 3 per cent. Consumption is projected to remain stagnant at last year's level.

The United Nations Food and Agriculture Organisation (FAO) estimates the paddy production in 2004 (calendar year) to rise to around 613 million tonnes, against about 590.5 million tonnes in 2003.

Bigger harvests in China and India will account for much of the increase. Output increases have been reported from other relatively smaller rice producing countries as well.

FAO expects total world trade in rice in 2004 to be around 25.5 million tonnes, some 2.5 million tonnes less than 28 million tonnes traded in 2003. Besides reduced export availability, higher prices and rising freight rates may impact global trade.

Moreover, the import requirement of countries like Bangladesh and the Philippines is stated to be lower this year thanks to better domestic harvests in 2003.

China is projected to export only around 1.5 million tonnes rice in 2004, down from 2.6 million tonnes shipped last year. China experienced a sharp rise in the domestic price of rice in recent months, forcing the government to control rice exports and restrict sales abroad.

In India, the government-owned Food Corporation of India (FCI) temporarily suspended the sale of rice for exports, pending an assessment of the stock and availability situation. As a result, rice exports from India are projected by FAO to be around 2.5 million tonnes in 2004, down from 4.4 million tonnes in 2003.

Myanmar, another regular exporter of rice, stopped exports for six months due to reduced domestic availability and higher prices. Exports from Myanmar may not exceed 5 lakh tonnes, almost the same as last year but well below normal levels.

Rice exports from Pakistan are expected to remain at the 2003 level of 2 million tonnes but only if the government continued to give transportation subsidies to exporters.

In contrast, rice shipments from two major exporters, Thailand and Vietnam, are expected to rise to 8.5 million tonnes and 4 million tonnes, respectively.

Rice prices registered a strong recovery in 2003 in the international market. The FAO rice price index (1998-2000 base) averaged 82 for whole of 2003, against 72 in 2002.

The index has continued its rise in 2004 with the index climbing to 109 by March 2004, the highest since February 1999 and 20 points above the level in October 2003.

FAO expects rice prices to rise in next few months as the next Chinese paddy harvest is not expected before June. However, the price scenario could change if India or Myanmar lift curbs on exports.

Global rice consumption, however, is forecast to remain almost static in 2004 around the 2003 level of 415 million tonnes. In per capita terms, rice consumption may shrink marginally to 58.6 kg in 2004 from 58.7 kg in 2003.