Rice prices will probably remain under “pressure” in coming months as global production outpaces consumption for the eighth consecutive year, according to the United Nations’ Food & Agriculture Organization.
“Under current prospects of ample availabilities, export prices could remain under downward pressure in the coming months,” FAO said in a statement e-mailed today.
Global paddy production in 2012 is expected to increase 1.7 percent on year to 732.3 million metric tons, equivalent to 488.2 million tons of milled rice, exceeding consumption. That will boost global inventories, lifting the world stock-to-use ratio to new highs, the Rome-based agency said. Production is expected to increase in Bangladesh, China, India, Myanmar, Pakistan, the Philippines and Thailand, it said.
Lower prices of the staple for half the world may extend a decline in global food costs, which fell for the first time this year in April on lower costs for dairy, grain and sugar, according to an index of 55 food items tracked by the FAO.
“The large and growing stockpile could be a distinctly bearish factor in the year ahead as it is not known when inventories will be released to the world market,” said Darren Cooper, a senior economist at the International Grains Council in London.
Ending stockpiles in 2012 may rise 8.4 percent to 152.8 million tons, on reserve replenishment mainly in China, India, Indonesia and Thailand, the FAO said. The government’s rice purchase program in Thailand will boost its ending-stock of milled rice by 19 percent to 7.4 million tons in 2012. Global inventories will rise further to 164 million in 2013, it said.
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