Rice prices could fall to US$16/100 lbs. in Q4 from US$16.988 currently, as India resumes non-basmati exports, buyers purchase less, global harvests reach record 458.4 million tonnes in 2011/2012

Andrew Rogers

LOS ANGELES , September 22, 2011 (Industry Intelligence) – Rice prices have jumped 42% in Chicago trading over the last 12 months, beating corn and soybeans, but prices could fall as India resumes non-basmati shipments after lifting a ban Sept. 8, buyers such as Indonesia purchase less than forecast, and global harvests reach a record, Bloomberg reported Sept. 21.

Indian exports will create a bearish impact and futures in Chicago could average US$16 per 100 pounds in the fourth quarter, compared with $16.988 so far this quarter, according to Standard Chartered Plc. analyst Abah Ofon. Prices could drop with Indian exports cutting Thailand’s market share in Africa, according to Mohammed Ismet, senior advisor to Indonesian food agency Bulog.

Exports from India could reach 4 million tonnes in the year beginning April 1, All India Rice Exports Association president Vijay Setia said Sept. 13.

Shipments from India will make up 11% of global trade this year, surpassing the U.S. and Pakistan to become the third-largest exporter, according to a Sept. 12 report from the U.S. Department of Agriculture.

Pakistani exports could surpass 4 million tonnes in 2011-2012, beating USDA estimates, while production could jump 38% to 6.5 million tonnes, Rice Exporters Association of Pakistan board member Shamsul Islam Khan said.

Traders could be exposed to potential losses as volatility may increase from the end of India’s export ban combined with Thailand’s new policy to purchase rice from farmers at above-market prices, according to Amit Gulrajani, rice trading and shipping manager at Olam International Ltd.

Imports by Indonesia could be set at 1.2 million tonnes this year, below the USDA forecast of 2.2 million tonnes, according to Ismet.

Bangladesh, the largest buyer in South Asia, could reduce its import forecast by half with the increase in local production, the Bangladesh Directorate General of Food said. Imports may reach 400,000 tonnes in the year beginning July 1, compared with an estimate of 800,000 tonnes made two months ago, according to Bardul Hasan, director for procurement at the Bangladesh Directorate General of Food.

Global rice production could hit a record 458.4 million tonnes in 2011-2012, for a second year of record supply, fueled by larger output in China, the Philippines, and the U.S., the USDA said.

The primary source of this article is Bloomberg, New York, New York, on Sept. 21, 2011.

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