Rice Prices Seen At $360/Ton By 2008-09, Then Decline-OECD

LONDON (Dow Jones)--Global rice prices are expected to rise in the short term due to increased dependency on imports by producers such as China and Indonesia, the Organization for Economic Cooperation and Development and U.N. Food and Agriculture Organization said Wednesday in their Agricultural Outlook for 2007-16.

In the longer term, prices will start a "gradual decline," the report said.

The two groups predict rice prices will rise to $360.3 a metric ton in 2008-09, but then start to decline in subsequent years to hit $326/ton by 2016-17.

The report said the average price between 2001-02 and 2005-06 has been $238.4/ton.

Rice prices rose in the past decade due to a decline in global stocks and increased rice trade, the report said. Asian producers' demand for imports increased along with demand in Turkey and the Middle East.

Imports will continue to increase due to changes in trade policy in some OECD countries, the report said. Scaled back import duties in the E.U. and an enlarged quota in South Korea will spur imports, the report said.

The main exporters will remain in Asia, principally Thailand, Vietnam and India, the report said. Only moderate export growth is expected in the U.S.