MercoPress. South Atlantic News Agency

Rice consumption forecasted to outpace production in 2008

World consumption of rice continues to rise and outpace production and the trend will continue in 2008, bringing with it a host of factors that will impact rice producers said Carl Brothers senior vice president of Riceland Foods.

Speaking at the recent Mid-South Farm and Gin Show in Memphis, Tennessee Brothers said that global rice stocks finished in December 2007 at 72 million tons, an all-time low in supply/use comparison. "If we look at these low stock numbers and the demand we're seeing around the world ? it continues to be a concern," says Brothers. With supplies tight, heavy rice-producing countries are restricting exports, preventing rice from escaping outwards to the international market. Vietnam, Egypt and Guyana have all issued export bans, with India essentially following suit. China has switched from an export subsidy to an export tariff, a cautionary measure in an unstable environment. "U.S. rice prices stand at 635 US dollars per ton. The Asian prices have gone up, both in Thailand and India. If you compare with Thailand, the US biggest competitor in Asia, they have shot up to 500 US dollars per ton. The market has moved very quickly as there continues to be recognition that things are tight." Brothers noted that US long grain rice has seen recent trouble and production is down 316 million bushels. The carry-in on long grain was 63 million bushels, down 14%. However, medium grain rice promises to be a bright spot for US farmers. Production at 123 million bushels was up 16%. The increase was mainly due to plantings in Arkansas. "Arkansas went from 106,000 acres of medium grain a year ago, to about 148,000 acres in 2007." Brothers also mentioned that Australia, hit by a continuous drought remains hopeful of planting rice this year, but questions linger about governmental allocations of water. Buyers from Australia have been in the US for the past six to nine months. Another country looking into buying US rice is Turkey, reacting to Egypt's export ban. Regarding other markets such as Haiti, Brothers said that the country lingers on the brink of food riots and the Haitian government is under increasing pressure. Iraq has held off from US rice for several months, waiting for lower prices, and instead bought from Thailand and Vietnam. But in the next round of buying, Iraq is expected to once again focus on US rice. Saudi Arabia has become what Brothers calls "the good news story." With India pulling rice out of the market, U.S. rice is moving back into Saudi Arabia, and the shift should continue in the near future. Brothers was also hopeful about Cuba. The illness of Fidel Castro and changes in leadership has brought Cuba back into view as a potential US customer. "Cuba would be a huge market for the United States and it's right here on our shore". Finally Brothers admitted that the 2008 rice planting will certainly be affected by the tremendous amount of wheat and corn in the ground, as well as soaring soybean prices.