China Rice Output Jump, India Global Production Relies

Rice production expected increase in India and China could help achieve a 2.5 percent hike in global output this year.

Analysts said favorable monsoon rains in Asia, particularly in these two big countries are key to achieve the target while larger crops are also expected in Bangladesh, Indonesia, Pakistan, Thailand and Viet Nam.

However production may fall in Japan and Sri Lanka, they added.

Recent relaxation of export restrictions in India may boost that country?s deliveries. Australia, Argentina, Brazil, Cambodia, Uruguay and Viet Nam are also expected to ship more Rice this year, but Egypt, Pakistan and the United States may export less.

On Thursday, FAO reduced its forecast of global Paddy production in 2011 by 1.5 million tonnes to 718.3 million tonnes (478.9 million tonnes, milled).

More production is expected in Africa with a 2 per cent expansion, while Central America and the Caribbean will grow 4 per cent, South American prospects have been raised, with recovery led by Brazil, but production may fall in Ecuador and Peru.

FAO sees 2011 world trade in rice growing by 1.4 million tonnes since April to 33.2 million tonnes (milled), showing larger than previously anticipated imports by Bangladesh, China, Indonesia, Iran and Nigeria, offsetting downward revisions in Colombia and the Philippines.

Expanded export adjustments showed improved delivery prospects for Brazil, India, Thailand and Viet Nam, outweighing lower forecasts for China and the United States.

At 33.2 million tonnes, trade in Rice will be 6 per cent larger than in 2010, passing the 2007 record. Anticipated growth will be mainly from more imports by Asian countries, many trying to rebuild stocks and stabilise domestic prices.

Africa, Europe and North American countries are expected to buy more, but abundant crops in Latin America and the Caribbean may reduce deliveries to the region.

Pressure from new harvest secondary crops slightly depressed international rice prices in May, the FAO said, for a third consecutive month of decline. The downward price tendency reversed in June and remained positive in July.

In the coming months, international rice export prices will be influenced by the progress of the 2011 Paddy season in northern hemisphere countries and, in particular, by the performance of the south-west monsoon in Asia. Policy actions by governments and exchange rate movements will also play a critical role.