Rice prices to rise again

Food and Agriculture Organisation, in its report, has said the global rice output will register a marginal rise while the prices are heading north.

However, India's chances of benefiting from the soaring rates are low following the strengthening of rupee against dollar.

According to the report, the world rice trade in 2007 is likely to hit a new record.

International rice prices have remained on an upward trend since March, but are expected to remain steady until October when the new crop will hit the market. Again, weather conditions in the next three months would be another major factor to be taken into consideration.

So far, crop outlook in Asia looks positive, which has encouraged expectations of a production recovery. Forecast of global rice trade in 2007 has been raised to 30.2 million tonnes, almost one million tonne above 2006 and a new record.

Import demand from Bangladesh, Indonesia,

Cuba, Brazil, the EU and Russian is expected to expand. Indonesia is reported to have established a quota of 1.5 million tonne for 2007. A large part of this additional demand may be met by Cambodia, China, Egypt, Myanmar and Thailand, the FAO report said, adding that limited supplies and high domestic prices are likely to depress sales of Argentina, Australia, Brazil, India, Pakistan and the US.

Among the areas of uncertainties is the import demand from Indonesia. If the country withdraws from the market, the fallout on prices would be serious. Rice prices globally will be influenced in the next few months by the pattern of monsoon, exchange rate movements and transportation logistics.

On production prospects in India, the FAO report said assuming normal growing conditions, the country is expected to harvest 138 million tonne of paddy, barely one per cent more than in 2006, but in line with past trends observed since 1990.