MercoPress. South Atlantic News Agency

World rice production forecasted to increase 1.8% in 2008

UN Food and Agriculture Organisation (FAO) has predicted that world rice production is expected to rise by 12 million metric tonnes or 1.8% in 2008, assuming normal weather.

This will help to ease the very tight global supply situation that has pushed prices to record highs. Since January international rice prices have risen 20%, according to the FAO All Rice Price Index. In March high quality Thai 100% B rice rose to 546 US dollars a ton, up 13% from the previous month and up 68% from the same time last year. FAO estimates paddy rice production rose 1% in 2007 to 650 million tons, but still fell short of population growth for the second consecutive year. Higher rice production in 2008 could reduce the pressure, but short-term volatility will probably continue, given the very limited supplies available from stocks, a senior official said. The higher output will not arrest a fall in rice trade as major exporting countries restrict movement to protect domestic supplies. In the addition to record high prices, government incentives have been behind the push to raise output. The FAO looks for sizable output rises in all the major Asian rice producing countries, especially Bangladesh, China, India, Indonesia, Myanmar, the Philippines and Thailand. In United States farmland prices have increased and in 2008 US Department of Agriculture predicts prices to appreciate by 14.9 percent.