Rice price might shoot up in 2010

Global rice prices may shoot up by March-April 2010 on the back of heavy buys by the world’s largest rice importer, Philippines, even as India gears up to possible imports during the same period. India does not import rice and has only exported for more than a decade now. India also ranks among the world’s top rice consumers. “We will only be able to assess the possibility and quantum of rice imports by March-April after projections of the rabi wheat output have been made for the 2009-10. The CoS early in September directed that the rice budget be reworked after production assessments become clear. We will be able to do that after mid-October when the advance estimates are scheduled,” a food ministry official said. As per assessments, in the aftermath of the recent floods in Karnataka and AP, a kharif rice output shortfall of 15 million tonnes cannot be ruled out. According to projections, there will be rice imports of 2-5 million tonnes in early 2010.









That has forced the government to tangentially revise its output target for winter rice from an average 12 million tonnes to 18 million tonnes. In addition, it is pushing for an early rabi sowing in order to boost wintersown food crop output to a record high. With that in mind, the government earlier this week ruled out any possibility of opening up wheat exports, banned since 2007, in the near future. It, however, also put off a related key decision on whether to ease plant quarantine restrictions on wheat imports as done in 2006 when imports were made to boost domestic supply and cool prices.

To defuse the pressure on wheat prices in the retail market, India plans to sell around 4.5 million tonnes of the commodity in the peak consumption period of October-December in the domestic market, through tenders to bulk consumers, on the basis of allocated quantity to states by Food Corporation of India.

In September, Philippines was hit by natural disasters that wiped out an estimated 4.5 lakh tonnes of rough rice. The slump engineered by Tropical Storm Ketsana and Typhoon Parma was “a significant loss,” according to commodity monitors.

Towards the end of last month, Philippines National Food Authority spokesman Rex Estoperez said the damage to rice crops from typhoons Ondoy and Pepeng would be felt by the country in the first half of 2010. A decision on the quantum of imports could be taken this week. Thailand and Vietnam, the two countries that benefited the most from India’s rice export ban, are already sizing up the gains.