FAO lowers global rice forecast for 2012

But world production will still increase
FAO 6 Aug 12;

Bangkok, Thailand, 6 August 2012 - Below normal monsoon rains in India are the chief cause of a 7.8 million tonnes downward revision in the forecast for global rice paddy production in 2012, although world output should still slightly surpass the excellent results achieved in 2011, according to the July 2012 issue of the Rice Market Monitor released by the Food and Agriculture Organization of the United Nations today.

Global paddy production is expected to total 724.5 million tonnes (483.1 million tonnes on a milled basis), compared with the original forecast in April of 732.3 million tonnes (488.2 million tonnes on a milled basis). The downward revision was mainly the result of a 22 percent lower-than-average monsoon rainfall in India through mid-July, which is likely to reduce output in the country this season. 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.

In sharp contrast with trends observed in the maize and wheat markets, rice prices have remained surprisingly stable after gaining 2 percent in May. 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.

Production gains

Some countries are expected to register production gains, including China (Mainland), Indonesia and Thailand, along with several other countries in Asia. Production in Africa may increase by as much as 3 percent, while Australia's rice harvest was 32 percent higher than last year. Prospects are also good for the South American nations of Bolivia, Colombia, Guyana, Peru and Venezuela, but poor precipitation and shifts towards more remunerative products in Brazil, Argentina, Paraguay and Uruguay are behind a 7 percent drop of production in Latin America and the Caribbean as a whole.

Asia accounts for the lion's share of global rice production, and FAO is predicting the region will reap 657 million tonnes in 2012, up 0.4 percent from its strong 2011 performance.

Global rice trade in 2012, however, is expected to decline by 1 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 Viet Nam also shipping less rice.

Global rice inventories at the close of the 2012-2013 marketing years were revised upward by 200 000 tonnes to 164.5 million tonnes (milled basis). This would imply a 9 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.

FAO cuts global rice output forecast for 2012
Reuters 6 Aug 12;

Aug 6 (Reuters) - The United Nations' Food and Agriculture Organisation said on Monday it had cut its 2012 global forecast for rice paddy production by 7.8 million tonnes to 724.5 million tonnes, due mainly to below average monsoon rains in India.

A 22 percent lower than average monsoon rainfall in India through mid-July is likely to reduce output in the country this season, FAO said. Production forecasts have also been cut for countries including Cambodia and Nepal.

It said that based on the new forecast, world rice paddy output in 2012 would still be marginally above levels reached in 2011.

As rice supplies and stocks are abundant, the likelihood of a strong price rebound in coming months is minimal, but the future direction of rice prices remains uncertain, FAO said.

In an interview with Reuters in July, FAO cited plentiful supplies of rice as one reason why world markets are not yet facing a food crisis of the kind seen in 2007/2008, despite soaring grain prices.

(Reporting By Catherine Hornby; editing by Keiron Henderson)

FAO worried about grain rally, sees no food crisis
Reuters 20 Jul 12;

(Reuters) - The United Nations' food agency is worried about an ongoing drought-fuelled grain price rally and sees no respite in price rises for the time being, a senior economist and grain expert at the Food and Agriculture Organisation (FAO) said on Friday.

"We are concerned for two reasons: first the pace at which price rises are taking place and second because at least for the time being there seem to be no relief in prices, in particular for corn, soybeans and wheat," FAO's Abdolreza Abbassian told Reuters in a telephone interview.

But the current situation on the world markets is not a repeat of the 2007/08 food crisis when high prices sparked riots in many poor countries. This is because supplies of rice, a key staple in many developing countries, is abundant and the wheat situation is better, Abbassian said.

"We do not see any production or supply problems with rice. That is very important for food security of millions of people around the world," he said.

The FAO expected world coarse grain supplies to tighten in the current season due to corn problems in the drought-stricken United States.

(Reporting by Svetlana Kovalyova; Editing by Alison Birrane)