Thai Paddy production could drop in 2009

Paddy production in 2009 is expected to be around 668 million tonnes,
three per cent less than last year while rice price is likely to drop
further, according to the United Nations' Food and Agriculture
Organisation (FAO).

In its Rice Market Monitor, FAO said the drop reflected unfavourable
climatic conditions in northern hemisphere Asian countries, which are
about to harvest their main 2009 paddy crops.

Despite the anticipated decline, production in 2009 would still be high,
second only to the record achieved in 2008.

FAO said the delayed progress of monsoon rains and erratic precipitation
patterns are behind a worsening of the 2009 production outlook in Asia,
now forecast to gather 601 million tonnes of paddy, which is 22 million
tonnes or four per cent less than in 2008.

Besides India, where the drop is likely to be particularly pronounced,
Taiwan, Iraq, Japan, South Korea, Nepal, Pakistan, Sri Lanka and world's
largest rice exporter Thailand may also face declines.

FAO said only part of this is expected to be offset by gains in
Afghanistan, Bangladesh, Cambodia, China, Indonesia, Iran, Malaysia,
Laos, Myanmar, the Philippines and Vietnam.

Despite less favourable growing conditions this season, paddy production
in Africa is set to remain close to the outstanding 25.4 million tonnes
gathered in 2008, reflecting an expansion drive from governments and
renewed interest in the sector from both institutional and private
investors.

According to the forecast, global rice trade in 2009 was expected to
rebound by two per cent to 30.7 million tonnes.

The recovery would be mostly on account of greater imports (the
Philippines, EU-27 and countries in the Middle East), while deliveries
to Bangladesh, Indonesia, Malaysia, Sri Lanka, Turkey and western
African countries are set to fall, often sharply.

Based on current expectations, FAO's first forecast of rice trade in
2010 stands at 30.3 million tonnes, one per cent less than projected in
2009, and the near 400,000-tonne fall would arise from weaker import
demand from major rice importers Brazil, Indonesia and the Philippines.

International rice prices remained generally steady in July and August
but fell markedly across all market segments in September 2009, said FAO
which expects the arrival of fresh supplies in coming months to cause
them to slide further.