Rome - The world's production of rice is set to increase by 12 million tons or 1.8 percent in 2008, "easing the current very tight supply," the United Nations Food and Agriculture Organization (FAO) said Wednesday. But international trade in rice, one of the globe's main food sources would continue to decrease "mainly due to restrictions in the main exporting countries," including China, India, Egypt and Vietnam the Rome-based FAO said in a statement.
FAO noted how since January international rice prices have seen a steep increase of about 20 per cent a situation that reflects the very limited supplies available for sale.
"The tendency for further price rises, however, may diminish somewhat in the next few months, with the arrival of new rice harvests in Brazil or Uruguay but also in Bangladesh, India, Indonesia," the FAO statement said.
Assuming normal weather conditions, production increases are expected in all the major Asian rice producing countries, especially Bangladesh, China, India, Indonesia, Myanmar (formerly Burma), the Philippines and Thailand, where supply and demand are currently "rather stretched," FAO said.
Production is also set to increase in in Africa, particularly in Egypt, Guinea, Nigeria and Sierra Leone, FAO said.
Production is expected to recover strongly in Latin America and also increase in the European Union, it said.
However FAO warned that production could decrease in Japan - one of the few countries where producer prices fell last year - while it forecast a "dismal production" in Australia reflecting extremely scarce water supplies.
A reduced crop is also expected in the United States, mainly as a result of a cut in culticated areas caused by mounting competition from more profitable crops, FAO said.
"The international rice market is currently facing a particularly difficult situation with demand outstripping supply and substantial price increases," FAO Senior Economist, Concepcion Calpe, said in the statement.
"Higher rice production in 2008 could reduce the pressure, but short-term volatility will probably continue, given the very limited supplies available from stocks. This implies that the market may react very strongly to any good or bad news about crops or policies," she added.
International trade in rice in 2008 is currently foreseen to reach 29.9 million tons - 1.1 million tons lower than the revised 2007 trade estimate, FAO said.
