countries will hinge on what major growers India, China and Thailand do
to make up for millions of tons of the staple lost to floods and
droughts, officials said Thursday.
All eyes are on India, traditionally one of the world's top rice
exporters, which may import 1 million metric tons to 3.5 million metric
tons next year to replace production losses after a drought ravaged the
country's rice bowl.
"Just the fact that India has significantly reduced production alone is
a significant development given the tightness of supplies that we see in
the world today," said Jim Guinn, vice president of USA Rice Federation.
"But the fact that they may actually be an importer is of even more
importance," he said.
The US Department of Agriculture said in a report on Thursday that rice
output in India could fall by up to 17 million tonnes.
India has begun importing rice to counter an expected large shortfall
following the driest monsoon season in nearly four decades, the Press
Trust of India said on Thursday.
The move to import rice comes amid government fears that output will
fall short by up to 16 million tonnes in the world's second-largest rice
producer and follows years of bumper output.
"About 400,000 tonnes of rice has already been imported by traders and
the figure is going to go up," the news agency quoted a leading
exporter, who did not wish to be identified, as saying.
Rice prices in the domestic market have soared by about 25 per cent in
the past four months on supply worries.
India, which has nearly 1.2 billion people, suffered the driest monsoon
since 1972 that affected rice-producing areas of the country.
The rice crop was later hit by widespread flooding.
The news agency said purchases from overseas markets by private traders
would increase in coming days as the government had abolished customs
duty of 70 per cent.
India produced 99.2 million tonnes of rice last year.
Agriculture Ministry Secretary T. Nanda Kumar said earlier in the week
that the government would not import rice but that it had created an
opportunity for private traders to do so.
The Federation of All India Rice Millers Association General Secretary
Sushil Kumar Choudhury said some traders in southern India have
contracted to import rice in huge quantities from rice-producing
countries like Thailand.
India's return to the import market is viewed as pushing up the price of
benchmark Thai 100 per cent Grade B rice, which this month traded at
$US530 per metric ton, though still down from more than $US1,000 at the
height of last year's food crisis.
Robert Papanos, a trader from Seacor Commodity Trading LLC, told an
international rice conference in The Philippines that prices were bound
to rise because India was unlikely to return as a top exporter for three
to five years due to recent blows to its rice production, pressures to
increase food supply for its booming population, lack of land and
problems with water.
"It means that supply for world trade loses roughly four million tons,"
he said, adding that that allows top exporters Thailand and Vietnam to
"drive the car" and influence prices.
India will import rice next year, or threaten to, not because of trade
reasons but domestic politics, he added.
But Papanos warned of higher unpredictability in the market because of
weather anomalies, new political interference by governments, and rising
costs of crude oil and farm inputs.
Guinn said other factors that could influence prices include whether
China will export or not, and if Thailand releases its bumper stocks.
China holds half the world's rice stocks and has been exporting on-and-off.
"The circumstances are there certainly for another panic in the
marketplace," Dwight Roberts, president and CEO of US Rice Producers
Association, told The Associated Press.
The 2008 rice crisis demonstrated that the crop "is a very political
commodity," Roberts said.
Last year's record-high price of rice and other staples led to riots in
at least 30 countries, according to the World Food Program. The biggest
producers, Thailand, Vietnam and India, had curbed exports to protect
domestic supply. In The Philippines, people queued to buy low-quality
rice at subsidised prices while traders were suspected of hoarding.
Philippine Agriculture Secretary Arthur Yap said on Wednesday that any
rice crisis similar to last year's would hurt developing countries like
his, the world's top rice importer.
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