Rome, Italy
May 12, 2008
Myanmar disaster could worsen
outlook
Rice production in Asia, Africa and Latin America is forecast to
reach a new record level in 2008, FAO said today, warning that
world rice prices could remain high in the short term, as much
of the 2008 crops will only be harvested by the end of the year.
“World paddy production 2008 could grow by about 2.3 percent
reaching a new record level of 666 million tonnes, according to
our preliminary forecasts,” said
FAO rice expert Concepcion Calpe.
Production growth could even be higher if recent appeals and
incentives to grow more rice lead to a larger expansion of
plantings, according to the Rice Market Monitor. “But the
cyclone disaster in Myanmar could well worsen our forecast,” she
added.
Myanmar
The destruction of Myanmar’s food basket may sharply decrease
national rice production and impair access to food, according to
first FAO estimates. The cyclone damage could worsen the current
global rice production outlook. The cyclone struck when paddy
farmers were harvesting their dry season crop accounting for 20
percent of annual production. Entire rice-growing areas are
flooded and many roads and bridges are impassable. Several rice
warehouses and stocks were destroyed. Rice prices in Rangoon
have already surged by nearly 50 percent.
Myanmar may need to turn to neighbouring countries, such as
Thailand and Viet Nam for rice imports. This could lead to
further pressure on world prices.
Major gains
“For the first time, paddy production in Asia may surpass the
600 million tonne benchmark this year, amounting to 605 million
tonnes,” Calpe said. “Major gains are expected all across the
region. Bangladesh, China, the Philippines, Thailand and Viet
Nam could register the largest gains. Prospects are also buoyant
for Indonesia and Sri Lanka, despite some recent flood-incurred
losses,” Calpe said.
Assuming normal rains in the coming months, rice production in
Africa is forecast to grow by 3.6 percent to 23.2 million tonnes
in 2008, with large expansions anticipated in Ivory Coast,
Egypt, Ghana, Guinea, Mali and Nigeria. Paddy production in
Latin America and the Carribbean is expected to rebound by 7.4
percent to 26.2 million tonnes in 2008. Production prospects,
however, are negative for Australia, the United States and
Europe.
Prices
Rice prices have skyrocketed by around 76 percent between
December 2007 and April 2008, according to the FAO Rice Price
Index. International rice prices are expected to remain at
relatively high levels, as stocks held by exporters are expected
to be reduced heavily. In addition, other large importers will
probably return to the international market to buy rice,
including the Islamic Republic of Iran, Saudi Arabia, Nigeria
and Senegal. “Prices are expected to remain extremely firm, at
least until the third quarter of 2008, unless restrictions on
exports are eased in the coming months,” Calpe said.
In an attempt to avoid food scarcities in their own countries,
major rice exporters have recently imposed export bans, taxes or
minimum ceilings. “These measures further restricted the
availability of rice supplies on international markets,
triggering yet more price rises and tighter supply conditions.
At the moment, only Thailand, Pakistan and the United States,
among leading exporters, are exporting rice without any
constraints,” Calpe added. Auctions by the Philippines to import
massive volumes of rice have also contributed to record rice
prices.
For prices to fall, favourable weather conditions must prevail
in the coming months and governments relax rice export
restrictions. Even then, rice prices are unlikely to return to
the levels of 2007, as producers have to pay much more for their
fertilizers, pesticides and fuel.
Export restrictions will influence trade in rice, estimated to
reach 28.8 million tonnes in 2008, around 7 percent or 2.2
million tonnes lower than the 2007 record level.
Average world rice consumption per person is set to increase by
0.5 percent to 57.3 kilo per year, up from 57 kilo in 2007.
Despite high rice prices, consumers seem to shift away from more
expensive foods, in particular meat and meat products.
The sudden surge in world rice prices has shed some light on
major medium term constraints that have been often ignored in
the past two decades, such as low investment in agriculture,
especially irrigation, reduced funding for agricultural
research, environmental problems, stagnating productivity and
migration from rural areas to the cities.
Food summit
Heads of State and Government will meet in Rome (3-5 June 2008)
to discuss the impact of soaring food prices and how to improve
world food security. |
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