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Global rice output shrinking
BANGKOK, Oct 14:
Global rice production will shrink after weak rains in India and the end of a subsidy programme in Thailand hurt supplies from the biggest exporters, according to the Food & Agriculture Organisation (FAO).
Worldwide output of milled grain will probably drop 0.4% to 496.4 million metric tonnes in the 2014-2015 season from a year earlier, the UN agency said in a quarterly report.
Ending stockpiles will drop 2% to 177.7 million tonnes in 2014-2015, the first contraction in a decade, while global trade expands 1.1% to a record 40 million tonnes in calendar year 2015, the Rome-based FAO said.
Thailand ended a farmers’ support programme in February that had boosted supply to a record, prompting some growers to turn away from the crop, while the late arrival of the monsoon in India this year hurt harvest prospects.
Global rice prices will still face downward pressure as northern-hemisphere crops are harvested, and exporters have abundant inventories after years of uninterrupted output gains, the FAO said in the report.
“Prospects for global paddy production have worsened substantially, mostly because of erratic weather conditions, including late arrival of rains or lingering droughts, which were often followed by heavy downpours and floods,” the FAO said.
“Concerns that lower production in India, Pakistan and Thailand, will be supportive of international quotations are attenuated by prospects of still above-average harvests in these countries, as well as abundant inventories.”
The price of Thai 5% broken rice, a benchmark in Asia, was US$428 (RM1,395) a tonne on Oct 8 compared to US$450 a tonne at the end of 2013, according to data compiled by Bloomberg.
The grade fell to US$384 a tonne on May 28, the lowest since at least 2008.
Weak rains in India during the first half of the monsoon will cut output to 104 million tonnes from 106.5 million tonnes, while Thai output drops 1.6% to 24.8 million tonnes, it said.
The Southeast Asian nation will regain its position as the largest shipper, sending 10.6 million tonnes to overseas buyers, while Indian exports drop 20% to eight million tonnes, it said.
In Thailand, the forecast decline in paddy output is “associated with the February 2014 abolition of the rice- pledging scheme, which had guaranteed high prices to farmers since 2011,” the FAO said.
In India, production may drop 2.4% after the irregular monsoon, it said.