FAO revises downward estimate for 2014 world paddy production

Economy July 18, 2014 00:00

By Petchanet Pratruangkrai


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The FOOD and Agriculture Organisation's Rice Market Monitor (RMM) has slightly lowered its forecast for global paddy production this year from a previous projection, partly because of the slow onset of seasonal rains in Asia.

And it warned that the outlook was dependent on the timing and intensity of the looming El Nino weather phenomenon.

The FAO report forecasts 2014 production of 750.9 million tonnes, or 500.7 tonnes on a milled basis – 120,000 tonnes less than foreseen in April and just 0.5 per cent above the revised 2013 estimate.

Hiroyuki Konuma, FAO assistant director-general and regional representative for Asia and the Pacific, said that if drought in Asia – particularly in India – became serious, Thailand could become the world’s largest rice exporter instead of India this year.

Konuma said the FAO estimated that Thailand would export about 9 million tonnes of rice this year, 35 per cent higher than the 6.6 million tonnes in 2013, but would still hold 18.5 million tonnes of stock at the end of this season.

India would likely remain the No 1 rice exporter (10 million tonnes) followed by Thailand (9 million tonnes) and Vietnam (7 million tonnes) in 2014.

The FAO is closely monitoring the drought situation in India.

According to the RMM, Asia is anticipated to garner about 679 million tonnes in 2014, a volume only 0.2 per cent – or 1.1 million tonnes – higher than 2013. However, much will depend on seasonal rains, especially over the critical month of July.

"Such meagre growth reflects expectations of a poor season in India, but also in Indonesia, Nepal, Sri Lanka and Thailand, all of which might face year-on-year contractions," said the FAO report.

"By contrast, Bangladesh, mainland China, Myanmar, Pakistan, the Philippines and Vietnam are anticipated to see production expand, often underpinned by additional government support."

The United Nations agency’s 2014 production outlook for Thailand points to a 2-per-cent year-on-year drop to 37.5 million tonnes, or 24.8 million tonnes on a milled basis. This is because of the delayed onset of rain and expectations that farmers will plant less in anticipation of steep reductions in producer prices from those offered under the ousted elected administration’s paddy pledging programme.

Global rice utilisation in 2014-15 is set to expand 2.2 per cent to a new high of 502.3 million tonnes on a milled basis, sustained mainly by demand for food but also for other uses such as seeds, post-harvest losses and non-food industrial usage.

Based on the latest projections of population, the global per-person food-rice intake will remain stable at around 57.6 kilograms.

The FAO has raised its forecast of global trade in rice this year by about 100,000 tonnes and is now projecting a record 39.4 million tonnes, an outstanding 6-per-cent increase from the depressed 2013 level.

The 2.3-million-tonne expansion would be underpinned by strong import demand, mainly in Asia, where key markets such as Bangladesh, Indonesia and the Philippines are stepping up purchases abroad in an attempt to rebuild inventories and/or quell inflationary pressure.

On the export side, Thailand is projected to capture much of the world’s import-demand growth this year, reflecting a return of competitiveness following the suspension of the pledging programme and large offloads from state warehouses, according to the RMM.

Larger shipments from Thailand would partly displace deliveries by India, which, nonetheless, are envisaged to remain sizeable.