Rice exports surged in 2014 setting a new record – FAO

Rice exports surged in 2014 setting a new record – FAO

Bangkok, 18 December 2014 – Bumper crops and a surge in demand for rice, particularly in the Far East, have resulted in 2014 recording the highest rice export figures ever, the UN’s Food and Agriculture Organization (FAO) reported today.

While final figures won’t be confirmed until early next year, FAO’s last quarterly report for 2014, the Rice Market Monitor, indicates much of the forecast growth in 2014 global trade in rice is likely to be due to a surge in exports from Thailand, which again will claim title as the world’s top rice exporter.

Indeed, a development dominating international rice trade this year has been the resurgence of Thailand as a leading rice exporter, “an advance made possible by key policy changes regarding government market intervention, namely the suspension of the paddy pledging programme and public stock sales,” the report states. “The ensuing restoration of its competitive edge has permitted Thailand to recapture much of the market share lost to India and Viet Nam over the past two years,” it adds.

Increased exports of Thai rice to other countries in the Far East and Africa is expected to propel Thai rice exports to 10.2 million tonnes in 2014, which, if confirmed, would stand only 500 000 tonnes short of the 2011 record exports.

The RMM predicts that rice deliveries by India will fall by five percent to 10.0 million tonnes in 2014, depressed by a combination of heightened competition for markets and a reduction in demand in its major Basmati outlets. The export outlook is also bleak for Viet Nam, the RMM states, where official deliveries are now projected to remain close to the 2013 depressed level of 6.6 million tonnes, as the country is out-priced in Africa and rivalled by Thailand in important Far Eastern markets, such as the Philippines, Indonesia and Malaysia.

Production remains steady

Despite regional variations, overall, global rice production has remained steady, down only slightly from the previous record-setting year. Weather conditions contributed to a 0.5 percent decrease in Asia.

At 744.7 million tonnes (496.6 million tonnes, milled basis), the resulting 2014 global production forecast is expected to be only slightly lower this year compared with last year (down 0.2 percent or 1.6 million tonnes), reflecting a 0.1 percent contraction of both plantings and yields to 162.9 million hectares and 4.57 tonnes per hectare, respectively, brought about by unfavourable weather conditions.

Overall global trade in rice is expected to exceed 40 million tonnes in 2014 (40.2) and could reach 40.5 million tonnes in the 2015 calendar year, the RMM states.

Import Demand

The anticipated growth in global rice trade in 2014 is forecast to be sustained by a near 2.0 million tonne surge in shipments to Asian countries to 18.9 million tonnes. At a country level, the increase would mostly mirror a resurgence of demand from the Philippines, in the aftermath of damages incurred as a result of typhoon Haiyan and depleted inventories. The country may close the year with delivery of 1.8 million tonnes, up 1.1 million tonnes year-on-year, part of which to reconstitute public rice reserves, the report states.

Supply shortfalls and difficulties in meeting programmed local purchases necessary to service welfare programs also induced the Government of Indonesia to recur to international markets this year. The move is expected to underpin a 500 000 tonnes rise in deliveries to the country to 1.2 million tonnes. Traditionally a self-sufficient nation, Sri Lanka has been compelled to rely on supplies from abroad to compensate for significant production shortfalls, with 280 000 tonnes assessed to have been purchased by the country.

High domestic prices, particularly in the context of cheaper offerings abroad, also underpinned a steep rise in consignments to both Bangladesh and Turkey, now forecast at a higher level of 700 000 tonnes and 400 000 tonnes, respectively. Iraq, the Democratic People’s Republic of Korea, Malaysia, Nepal, Saudi Arabia and Qatar are all similarly envisaged to purchase more in 2014, while official deliveries to China (Mainland) hold steady at around 2.3 million tonnes, the report predicts.

Prices

International prices have eased further the RMM states. “Particularly steep falls have been evident in the fragrant segment, where quotations were weighed by prospects of large availabilities this season coupled with reduced import demand. These factors resulted in a 30 percent slump in the Aromatic rice sub-Index to seven year low of 190 points, reflecting increasing market arrivals, amid thinning buying interest,” the report said.

ENDS

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